The structure of the "Nine Heavens and Ten Lands" in the Human Cultivation World was actually formed in the last five hundred years. If there were a demarcation line to be spoken of, it would have to start with the story of how the Shu Mountain Sect lost its Demon Suppression Tower.
Ever since the Shu Mountain Sect lost the Zhenshan Divine Artifact, and their strongest support, its status gradually declined. The position of the first Immortal Sect in the human world naturally became vacant.
At that time, the two most powerful contenders were the overseas Penglai Upper Sect and the Starry Sky Divine Sect, which was independent of the three religions.