What caused the fractionation in Protestantism?

Scott Clark has an excellent summary, here. Here are some of the salient points:

The medieval Western (Roman) church was a tangle of internal tensions just waiting to burst apart.

If we consider the magisterial, confessional Reformation on historical terms, there were, by 1530, two churches in the West: Protestant and Papist. By 1580, there was one significant division within confessional Protestantism: Lutheran and Reformed and this division continued through the 17th century. There arose distinctions between a variety of polities in the 17th century, and these were on display at the Westminster Assembly, but there they were at the Westminster regarding each other as churches and crafting a common confession of faith.

The source of the millions of churches we see today wasn’t Luther. It was arguably an unorthodox, rationalist Frenchman who died in the middle of the 17th century.

As a matter of history, Rene Descartes has a lot more to do with the proliferation of religious organizations claiming to be “churches” than Martin Luther. It was Decartes who made everyone his own ultimate authority. The sovereign autonomy of the individual is the source of sectarianism, not the Reformation.

The picture is even more complicated than that, however. The radical spirit of the sovereign individual was present well before Descartes. It was present in the Anabaptist movement. They were sectarians and regarded as such by all the Reformers

The Anabaptist movement did not drop out of the sky... Behind them lay groups such as the Cathars and behind them lay the Montanists, Novatianists, and the Donatists. We’ve always had sectarians in the church who had (and have) an over-realized eschatology. The radical, individualist, rationalist-mystical, egalitarian spirit of the Anabaptists was secularized in the Enlightenment and thence we have a million sects with every man his own pope and every preacher his own source of new revelation.