The Chinese Zodiac and the Western Zodiac share many similarities yet their differences are quite substantial. Like each Chinese Zodiac sign has a Western counterpart, for example the Chinese Zodiac sign Tiger has similar characteristics to the Western Zodiac sign Aquarius while the Chinese Zodiac sign Pig is actually quite different than it's Western counterpart Scorpio.
The reason behind the differences in Zodiac signs is based on how the astrologers make their calculations. Chinese astrologers base their calculations on the moon and its cycles, that is, on the lunar year. Western astrologers base theirs on the solar year. Thus, Western signs are called sun signs. In Western astrology the month sign while in Chinese astrology it is the year sign. Chinese astrology also has month signs. Chinese months are not named (just numbered) and use the same names as year signs. So, there is such a thing as a Wood Sheep year and a Wood Sheep month.
Western signs are usually designated by one word, for example, Aquarius, and change from month to month. Chinese signs are designated by two Chinese characters and change from year to year. One character designates the year’s element and the other its animal sign, for example, Earth Tiger.
The Chinese have used both decimal based calendars as in the West as well as a twelve year based calendar. The two are both used simultaneously by Chinese astrologers, thus resulting in the compound signs.
Actually, Chinese astrology has four signs, one for the year, the month, the day and the hour of birth. In texts these are often referred to as the four pillars. This may sound different, but even here there is a similarity with Western astrology. That system, for example, uses hour signs as well, calling them ascendants.
Source: onlinechineseastrology.com