Tao te Ching: 21

The all-embracing quality of the great virtue (te) follows
alone from the Tao.
The thing that is called Tao is eluding and vague.
Vague and eluding, there it is in the form.
Eluding and vague, in it are things.
Deep and obscure, in it is the essence.
The essence is very real; in it are evidences.
From the time of old until now, its name (manifestations)
ever remains,
By which we may see the beginning of all things.
How do I know the beginnings of all things are so?
Through this (Tao).

Here essence also means intelligence, life force, or perhaps even soul. It is the animating force that makes a thing what it is.

One of the translators of the many translations of the Tao te Ching calls this the most important chapter of the book in a philosophical sense. Perhaps. I don't find it particularly inspiring. It doesn't give something to test. Still, I see how it forms the backbone of Taoism. It is an elegant restatement of the previous chapters.

Te, the great virtue, comes from the Tao not as a named thing but as a state of grace or virtue falls upon the virtuous one. Is that as redundant as the translation seems? Perhaps, but it is the only thing that comes from the Tao that isn't there because it is so named. Heaven and Earth were born of names. One to two, and two to many. It is not separate from the eternal Tao, but still it proceeds from it.

Te is there in form or objects. The te is in an object we might call a person even without it having a name. It is in the thing itself, not in the label plus name construct. Yet it is also in the label plus name construct. A person may possess Te, and a specific person may possess Te. Whatness and thisness. Quiddity and haecceity.

Not only is Te real, but because it is real we can see the virtue in other things. I think that is what Lao Tzu is saying.