Khawarij (referred to as Ibadi in vanilla) is primarily found in modern day Oman, while Sunni Muslims follow the succession of the elected Rashidun Caliphs, and Shia Muslims follow the Imams, (specifically the descendants of Muhammad), meanwhile Khawarij follow neither. The Khawarij adhere extremely strictly to Sharia law, but are often considered to be more tolerant of other views and religions than many other forms of Islam. The Khawarij movement was founded just 20 years after the death of Muhammad, making it older than either Sunni or Shia.
Khawarij is in the Muslim religion group, Sunni and Shia are considered heretics. Every other religion will be considered heathens.
Muslim religions have a piety slider. The two ends of the slider are Pious and Lack of Piety. Each have Bonuses. Bonuses are partially received and are increased as the percentage increases. However you only receive one type of bonus at a time. So it is preferable to be at either 100% pious or 100% unpious and not anywhere in between. Piety changes at rulers death.