Oracle-bone script was carved on turtle shells and animal bones during the Shang and other periods. Much of it concerns divination, with inscriptions often recording questions, outcomes, or related information.
It was already a relatively developed writing system. Its forms are related to modern Chinese characters but underwent long evolution, and decipherment still requires comparison of evidence.
Origins
It is generally agreed that the tradition of writing represented by oracle bone script existed prior to the first known examples, due to the attested script's mature state. Many characters had already undergone extensive simplifications and linearizations, and techniques of semantic extension and phonetic loaning had also clearly been used by authors for some time, perhaps centuries. However, no clearly identifiable examples of writing dating prior to the 13th century BC have been discovered. Sets of inscribed symbols on pottery, jade, and bone that have been discovered at a variety of Neolithic archeological sites across China have not been demonstrated to have any direct or indirect ancestry to the Shang oracle bone script at Anyang.
Style
Along with the contemporary bronzeware script, the oracle bone script of the Late Shang period appears pictographic. The earliest oracle bone script appears even more so than examples from late in the period (thus some evolution did occur over the roughly 200-year period). Comparing the oracle bone script to both Shang and early Western Zhou period writing on bronzes, the oracle bone script is clearly greatly simplified, and rounded forms are often converted to rectilinear ones; this is thought to be due to the difficulty of engraving the bone's hard surface, compared with the ease of writing them in the wet clay of the molds the bronzes were cast from.
The more detailed and more pictorial style of the bronze graphs is thought to be more representative of typical Shang writing using bamboo books than the oracle bone forms; this typical style continued to evolve into writing styles of the Western Zhou period, and then into the seal script within the state of Qin.
It is known that the Shang people also wrote with brush and ink, as brush-written graphs have been found on a small number of pottery, shell and bone, and jade and other stone items, and there is evidence that they also wrote on bamboo (or wooden) books just like those found from the late Zhou to Han periods, because the graphs for a writing brush and bamboo book, are present in oracle bone inscriptions.
Structure and function
Despite the pictorial nature of the oracle bone script, it was a fully functional and mature writing system by the time of the Shang dynasty, meaning it was able to record the Old Chinese language, and not merely fragments of ideas or words. This level of maturity clearly implies an earlier period of development of at least several hundred years. From their presumed origins as pictographs and signs, by the Shang dynasty, most graphs were already conventionalized in such a simplified fashion that the meanings of many of the pictographs are not immediately apparent. Without careful research to compare these to later forms, one would probably not know that these represented 'swine' and 'dog' respectively.
As William G. Boltz notes, most of the oracle bone graphs are not depicted realistically enough for those who do not already know the script to recognize what they stand for; although pictographic in origin, they are no longer pictographs in function. Boltz instead calls them zodiographs, emphasizing their function as representing concepts exclusively through words. Similarly, Qiu labels them semantographs.
By the late Shang, oracle bone graphs had already evolved into mostly non-pictographic forms, including all the major types of Chinese characters now in use. Loangraphs, phono-semantic compounds, and associative compounds were already common. One structural and functional analysis of the oracle bone characters found that they were 23% pictographs, 2% simple indicatives, 32% associative compounds, 11% phonetic loans, 27% phono-semantic compounds, and 6% undetermined.