Vajrayana is so called because of the tantric cults associated with it.
David B. Gray and Thomas Yarnall in their book The Cakrasamvara Tantra state that Vajrayana Buddhism was a product of Medieval Indian tantrism.

Tantras and Mantras have always been an integral part of what we call the distinct rituals of the various sects (sampradayas) of Hinduism. Mantra focusses on the centralised power of the mind (Satta) and Tantra deals with rationalised body power (Tama). Yantra, another of the three basic methods of worship, deals with the control over one’s ego and willpower (Rajas). As per the Hindu Website, ‘they are employed in the three important paths, which are mentioned in the Bhagvad Gita, namely the path of action (karma marg), the path of knowledge (jnana marg) and the path of renunciation (sanyasa marg)’.
Although the aforementioned manners of worship represent virtues that eventually help a person in attaining peace, prosperity and the path of truth, the excessively superior and puritanical views of the Brahmins (especially of the Later Vedic Age), resulted in a split in this ancient religion, that initially out-sprung from an erroneous interpretation of the ‘Shindu’! Thus were born alienated Hindus, who firmly denounced the rigid caste structure and sacred methods of worship (based on yajnas), as pronounced and preached by the various propagators of the religion!
Hinduism needed a reformation, but before it could even realise where it was heading to, masses had commenced following Buddhism and Jainism, both preached widely by Hindus who had, at certain point in their lifetime, lost faith in the philosophies of Hinduism (that were more focused on serving heavenly Gods with primer importance as compared to nature, animals and mortal men).
Buddhism, founded by the enlightened prince Siddhartha Gautama Buddha, way back in the 6th Century BCE, was seemingly more concerned with monastic orders (through which disciples could attain salvation) and moralistic life lessons (notable ones being the noble eightfold path and the Panchsheel) than finding out rites and rituals for an inexistent deity, both of which were eventually denounced!
In Buddhism at a Glance by the BBC UK, it is stated, “Buddhists believe that nothing is fixed or permanent and that change is always possible. The path to Enlightenment is through the practice and development of morality, meditation and wisdom. Buddhists believe that life is both endless and subject to impermanence, suffering and uncertainty.”
By the time the great preacher Buddha attained Mahaparinirvana, Buddhist ideals had succeeded in influencing many local Rajahs who served as chieftains of regional tribes and powerful emperors who ruled over impregnable Mahajanapadas (Buddha himself visited both Kosala and Magadha and helped in preaching his religious and philosophical views amongst their elites and intellectuals).
With patronage having been granted and the word of the newfound religious order having been shared amongst the subjects, young men and women were instantly drawn towards the religion for scholars have demented that Buddhism provided a middle path of attaining salvation. It was neither based on discriminating caste systems and vainly expensive yajnas like Hinduism and nor was it a rigid and unyielding path like Jainism. This middle path structure of Buddhism appealed mainly to the oppressed people of the day (among them the kings who were being dominated by their priests) who gradually converted themselves and their followers into Buddhism!
However, with the demise of the Buddha, disintegration followed, primarily due to differences in ideologies and philosophies of his most esteemed successors! Theravada, the oldest school of Buddhism, also called the School of the Elder Monks, came out first. It restrained itself to flexibility and adaptation, hence being strictly based upon the teachings of the Pali Cannon and thus, remaining confined to Ceylon (Sri Lanka), Java, Sumatra and parts of South East Asia only. A later disintegration would form the Hinayanas, which in the opinions of IAS Officer and Culture expert Nitin Singhania, is in an almost ‘non-existent’ form today!
The Mahayana school was the third principal segregation from the unified Theravada monastic order. This was based on Chinese Buddhist cannons and was patronised primarily under the Han dynasty of China! Today, the Mahayanas have the largest number of Buddhist disciples under its umbrella.
The Vajrayana is a comparatively newer version of Buddhist philosophy and ideals that is said to have had its origins in the early medieval Indian history.
With the accession of the Pala rulers to the throne of eastern India, the Buddhists came to be patronised alongside the followers of the Hindu sects, Saivites and Vaishnavites.
Dharampal, one of the greatest and most righteous of the Pala kings of Bengal, on the request of the Shrivijaya rulers, built another institution of higher learning (apart from viharas and Buddhist places of worship) at Vikramshila.
Vajrayana is so called because of the tantric cults associated with it. Contemporary scholars like David B. Gray and Thomas Yarnall in their book, “The Cakrasamvara Tantra: The Discourse of Śrī Heruka (Śrīherukābhidhāna)” state that Vajrayana Buddhism was basically a product of Medieval Indian tantrism (referring to the tantric movement).
That this new form of Buddhism was widely influenced by Hindu rituals and rites is no doubt since the two major ritual symbols of Vajrayana Buddhism include a bell and a vajra (weapon used by Indra, Hindu king of the Pantheon).
Tantric figures and mahasiddhas or powerful sages who followed Buddhist customs (sometimes likened to black magicians) are said to have existed during this period. In his book “Indian Esoteric Buddhism: A Social History of the Tantric Movement”, scholar and religious historian Ronald M. Davidson quotes, “Buddhist siddhas demonstrated the appropriation of an older sociological form—the independent sage/magician, who lived in a liminal zone on the borders between fields and forests. Their rites involved the conjunction of sexual practices and Buddhist mandala visualization with ritual accoutrements made from parts of the human body, so that control may be exercised over the forces hindering the natural abilities of the siddha to manipulate the cosmos at will. At their most extreme, siddhas also represented a defensive position within the Buddhist tradition, adopted and sustained for the purpose of aggressive engagement with the medieval culture of public violence. They reinforced their reputations for personal sanctity with rumors of the magical manipulation of various flavors of demonic females (dakini, yaksi, yogini), cemetery ghouls (vetala), and other things that go bump in the night. Operating on the margins of both monasteries and polite society, some adopted the behaviors associated with ghosts (preta, pisaca), not only as a religious praxis but also as an extension of their implied threats.”
Scholar David Seyfort Ruegg has further presumed that the tantric philosophies associated with this considerably younger form of Buddhism employed various elements that are “pan-Indian religious substrate”, taken mainly out of Saivite and Vaishnavite principles!
Regarding the Vajrayana literature, Buddhist scholar Alexis Sanderson observes that it possessed a wide resemblance to the Saivite ideals for this fact is highlighted in the classical text, “Mañjusrimulakalpa” where, as told by Manjushri, the Vaishnava, Garuda and Shaiva tantras find practice!
Another intriguing characteristic of the Vajrayana tradition is women. Women, who’d often been looked down in Hinduism, starting from the Later Vedic Age, when their presence wasn’t really considered crucial in a yajna, did find their place in the Vajrayana tradition. The Candamaharosana Tantra clearly states that:
Women are heaven, women are the teaching (dharma)
Women indeed are the highest austerity (tapas)
Women are the Buddha, women are the Sangha
Women are the Perfection of Wisdom.
As for the deities, Yamantaka and Cakrasamvara in Tibetan Buddhism are said to have been based on Bhairava, the monstrous disciple of Shiva and Nataraja, as told in tales of Shaivism.
Although Vajrayana is essentially a Buddhist school in itself, most of its philosophies are based on the teachings of the Mahayana Buddhism. The tantrism is the only addition it probably has of its own!
Scholars have often debated over the consequence of the sampradaya having ever come into being. There have been theories that have likened it to the period and cause of the decline of Buddhist monastic ideals and a cultural intermix that led to a gradual intermingling into Hinduism. Nevertheless, the Buddhist order continues to be in existence, popular in China, Japan, Tibet and parts of eastern India, although its objectives have taken a major shift from being one that was based on non existent beliefs and tantric practices to one that is making fast progress in the socio-religious sphere with new humanistic ideals adopted!

Writer is a Fellow of the Royal Asiatic Society of London and can be reached at hello@souhardyade.co.in