It has long been assumed that the extant bilaterian phyla generally have their origin in the Cambrian explosion, when they appear in an essentially modern form. Both these assumptions are questionable. A strict application of stem- and crown-group concepts to phyla shows that although the branching points of many clades may have occurred in the Early Cambrian or before, the appearance of the modern body plans was in most cases later: very few bilaterian phyla sensu stricto have demonstrable representatives in the earliest Cambrian. Given that the early branching points of major clades is an inevitable result of the geometry of clade diversification, the alleged phenomenon of phyla appearing early and remaining morphologically static is seen not to require particular explanation. Confusion in the definition of a phylum has thus led to attempts to explain (especially from a developmental perspective) a feature that is partly inevitable, partly illusory. We critically discuss models for Proterozoic diversification based on small body size, limited developmental capacity and poor preservation and cryptic habits, and show that the prospect of lineage diversification occurring early in the Proterozoic can be seen to be unlikely on grounds of both parsimony and functional morphology. Indeed, the combination of the body and trace fossil record demonstrates a progressive diversification through the end of the Proterozoic well into the Cambrian and beyond, a picture consistent with body plans being assembled during this time. Body-plan characters are likely to have been acquired monophyletically in the history of the bilaterians, and a model explaining the diversity in just one of them, the coelom, is presented. This analysis points to the requirement for a careful application of systematic methodology before explanations are sought for alleged patterns of constraint and flexibility.