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Quick version.
Luther, Calvin, Tindale, King James, Wesley, etc. PROTESTED certain practices taught by the Catholic Church (or later the Anglican church) and tried to reform them. However, the church would not reform and so they started their own churches or were the cause of other churches being formed. These church were formed when their founders read the scriptures and found inconsistencies with the doctrine taught and what was in the scriptures.
They are Protestant because they protested the problems.
In total there are Catholic, Orthodox (I'm not sure if this is protestant or a type of Catholic), Protestant, Restorationist, and Non-Denominational.
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