The 12 Zodiac animal signs (生肖 shengxiao) are, in order, the rat, ox (or cow), tiger, rabbit, dragon, snake, horse, goat (or sheep), monkey, rooster, dog, and pig (or boar).
Why 12? I am also not too sure. But there are many legends to explain the beginning of the zodiac. One of the most popular reads, in summarised form, as follows:
The rat was given the task of inviting the animals to report to the Jade Emperor for a banquet to be selected for the zodiac signs. The cat was a good friend of the rat, but the rat tricked him into believing that the banquet was the next day. The cat slept through the banquet, thinking that it was the next day. When he found out, the cat vowed to be the rat's natural enemy for ages to come.
A variation tells that the cat had asked the rat to wake him up the day of the Race. The rat agreed, but on the said day, he did not wake the cat in his greed to win. When the cat finally woke up and got to the racing ground, he found the race to be over. The cat then swore revenge upon the rat.
Interestingly, the cat does make it into the Vietnamese Zodiac, in place of the rabbit (see below).
Another popular legend has it that a race was used to decide the animals to report to the Jade Emperor.
The cat and the rat were the worst swimmers in the animal kingdom. Although bad swimmers, they were both intelligent. They decided that the best and fastest way to cross the river was to hop on the back of the ox. The ox, being a naïve and good-natured animal, agreed to carry them across. However, overcome with a fierce competitiveness, the rat decided that in order to win, it must do something and promptly pushed the cat into the river. Because of this, the cat has never forgiven the rat, and hates the water as well. After the ox had crossed the river, the rat jumped ahead and reached the shore first, and it claimed first place in the competition.
Following closely behind was the strong ox, and it was named the 2nd animal in the zodiac. After the ox, came the tiger, panting, while explaining to the Jade Emperor just how difficult it was to cross the river with the heavy currents pushing it downstream all the time. But with powerful strength, it made to shore and was named the 3rd animal in the cycle.
Suddenly, from a distance came a thumping sound, and the rabbit arrived. It explained how it crossed the river: by jumping from one stone to another in a nimble fashion. Halfway through, it almost lost the race but the rabbit was lucky enough to grab hold of a floating log that later washed him to shore. For that, it became the 4th animal in the zodiac cycle. Coming in 5th place was the dragon, flying. Of course, the Jade Emperor was deeply curious as to why a strong and flying creature such as the dragon should fail to reach first. The mighty dragon explained that he had to stop and make rain to help all the people and creatures of the earth, and therefore he was held back a little. Then, on his way to the finish line, he saw a little helpless rabbit clinging onto a log so he did a good deed and gave a puff of breath to the poor creature so that it could land on the shore. The Jade Emperor was very pleased with the actions of the dragon, and he was added into the zodiac cycle. As soon as he had done so, a galloping sound was heard, and the horse appeared. Hidden on the horse's hoof is the snake, whose sudden appearance gave the horse a fright, thus making it fall back and giving the snake the 6th spot, while the horse placed 7th.
Not long after that, a little distance away, the sheep, monkey, and rooster came to the shore. These three creatures helped each other to get to where they are. The rooster spotted a raft, and took the other two animals with it. Together, the goat and the monkey cleared the weeds, tugged and pulled and finally got the raft to the shore. Because of their combined efforts, the Emperor was very pleased and promptly named the goat as the 8th creature, the monkey as the 9th, and the rooster the 10th.
The 11th animal is the dog. His explanation for being late—although he was supposed to be the best swimmer amongst the rest—was that he needed a good bath after a long spell, and the fresh water from the river was too big a temptation. For that, he almost didn't make it to finish line. Just as the Jade Emperor was about to call it a day, an oink and squeal was heard from a little pig. The pig got hungry during the race, promptly stopped for a feast and then fell asleep. After the nap, the pig continued the race and was named the 12th and last animal of the zodiac cycle. The cat finished too late (thirteenth) to win any place in the calendar, and vowed to be the enemy of the rat forevermore.
Another popular story was when the Jade Emperor told the animals that he would be using animals to represent the years. So when the rat heard about this, he went straight to his best friend the cat. At once the cat thought" I should have a rest so that would be in my best form to run to the signing post." So the cat asked the rat to wake him up when the day came. So he agreed. When the day came, the rat realized that he probably wouldn't get to the signing post as fast as the others so instead of waking the cat he left him sleeping.
Whilst going running, the rat met up with the ox. He thought to himself" Ox is the fastest, strongest animal!" So the little mouse played a trick on the ox. He asked the ox if he would like to listen to him sing. The rat opened his mouth but he said nothing. "How was that?" he asked the ox and of course he replied " Sorry little rat,I didn't hear you." The rat told the ox to let him jump onto his back so that he could sing it more clearly, and the ox agreed. Soon without knowing, the ox was walking to the signing post, forgetting the rat on his back. When they reached there, the mouse jumped off and claimed first place. The ox following and the rest.
When the cat woke up and found out about this, he was furious. He swore that he would always hate the rat. They were enemies from then on.
In Buddhism, legend has it that Buddha summoned all of the animals of the earth to come before him before his departure from this earth, but only twelve animals actually came to bid him farewell. To reward the animals who came to him, he named a year after each of them. The years were given to them in the order they had arrived.
The legend of the Zodiac Race, of course, is by far the least credible of all explanations of the origin of the Chinese zodiac. Because the "twelve earthly branches" which correspond with the zodiac, was already in existence as early as the Zhou era, long before the advent of Buddhism. A parallel decimal set of symbols called "ten heavenly stems", corresponding with yin-yang dualism and the five elements (wood, fire, earth, metal, water) was in existence in the Shang dynasty as the stems were part of Shang rulers' names. The order of 12 Chinese zodiac animals was based on the number of toes/hooves, alternating between even and odd numbers. Rat was the first because unlike other animals of the Chinese zodiac which all had the same number of toes/hooves on each leg, rat has four toes on the front legs and five on the rear legs, so it was selected to be number one. Ox is second with four hooves on each leg, and tiger is the third three with five toes, hare is the fourth with four toes, dragon is next in line with five fingers on its claw, while snake ranks number six because it lacked any legs and zero is an even number, etc.