The word "canon" means "rule" “measure” or “weigh”. The idea of a standard for scripture was a gradual process of development.    In the normal sense the process of transmission of the Word of God is as follows:

God speaks in diverse manners.  

1.  Direct revelation to Moses and the Israel at the Mount Sinai

 Hence we have the five books of Moses as written down by Moses.

Deu 12:32  Whatever thing I command you, observe to do it: thou shalt not add to it, nor diminish from it.

Exo 17:14  And the LORD said to Moses, "Write this as a memorial in a book and recite it in the ears of Joshua, that I will utterly blot out the remembrance of Am'alek from under heaven."

Deu 31:24 – 26  When Moses had finished writing the words of this law in a book, to the very end,  Moses commanded the Levites who carried the ark of the covenant of the LORD,  "Take this book of the law, and put it by the side of the ark of the covenant of the LORD your God, that it may be there for a witness against you.

This is the seed from which an OT canon, or set of established books, grew.  The first five books were validated at Sinai where Moses and Aaron and the elders made the covenant in the visible presence of YHVH the God of Israel.

Exo 24:1-12  And he said to Moses, "Come up to the LORD, you and Aaron, Nadab, and Abi'hu, and seventy of the elders of Israel, and worship afar off.  Moses alone shall come near to the LORD; but the others shall not come near, and the people shall not come up with him."  Moses came and told the people all the words of the LORD and all the ordinances; and all the people answered with one voice, and said, "All the words which the LORD has spoken we will do." 

And Moses wrote all the words of the LORD.  …..  Moses took the blood and threw it upon the people, and said, "Behold the blood of the covenant which the LORD has made with you in accordance with all these words." 

Then Moses and Aaron, Nadab, and Abi'hu, and seventy of the elders of Israel went up,  and they saw the God of Israel; and there was under his feet as it were a pavement of sapphire stone, like the very heaven for clearness.  And he did not lay his hand on the chief men of the people of Israel; they beheld God, and ate and drank. 

The LORD said to Moses, "Come up to me on the mountain, and wait there; and I will give you the tables of stone, with the law and the commandment, which I have written for their instruction."

An entire nation of over a million people heard the voice of God.  In fact God wanted to talk to them all to establish his covenant.  But the people were afraid to continue to hear.  

Exo 20:18-22  Now when all the people perceived the thunderings and the lightnings and the sound of the trumpet and the mountain smoking, the people were afraid and trembled; and they stood afar off,  and said to Moses, "You speak to us, and we will hear; but let not God speak to us, lest we die."    And the LORD said to Moses, "Thus you shall say to the people of Israel: 'You have seen for yourselves that I have talked with you from heaven.

Deu 4:12  Then the LORD spoke to you out of the midst of the fire; you heard the sound of words, but saw no form; there was only a voice.

Deu 4:13  And he declared to you his covenant, which he commanded you to perform, that is, the ten commandments; and he wrote them upon two tables of stone.

Deu 5:1  And Moses summoned all Israel, and said to them, "Hear, O Israel, the statutes and the ordinances which I speak in your hearing this day, and you shall learn them and be careful to do them.

Deu 5:2  The LORD our God made a covenant with us in Horeb.

Deu 5:3  Not with our fathers did the LORD make this covenant, but with us, who are all of us here alive this day.

Deu 5:4  The LORD spoke with you face to face at the mountain, out of the midst of the fire,

Deu 5:5  while I stood between the LORD and you at that time, to declare to you the word of the LORD; for you were afraid because of the fire, and you did not go up into the mountain.

Hence at least the Ten Commandments (or at least its preamble part) were spoken by God directly  to the whole  people of Israel.

There were therefore two parts to the Sinaitic laws -  A part that God spoke directly to the people – the ten commandments and  a lot of other commandments that Moses wrote down under the instruction of God.  Only the stones which contained the ten commandments were laid inside the Ark of the Covenant which was in the Holy of Holies.  Other laws the 'Law and the Prophets' were kept outside the Holy of Holies.  

Thus the basis of the scripture is solidly founded on objective historical fact where God directly gave the Laws to the world.  For this there were over a million witnesses and seventy four elders who say YHVH the God of Israel with whom they as representatives of the nations covenanted with YHVH.

All the remaining revelations are dependent on this ultimate revelation until the final and full revelation in incarnation.

Jewish and Christian tradition holds Moses responsible for writing the Torah. Moses was the religious leader of the Hebrew people who led them out of slavery in Egypt and on to the Promised Land of Canaan in the thirteenth century B.C.E. The books of the Torah are popularly referred to as the Five Books of Moses.
A number of texts associate the Torah with Moses. Joshua built an altar using the specifications in "the book of the Torah of Moses" (Joshua 8:31). David charged Solomon to keep the commandments "as written in the Torah of Moses" (1 Kings 2:3). Ezra read from "the book of the Torah of Moses, which the Lord had given to Israel" (Nehemiah 8:1). About this same time the Chronicler referred to a passage from Deuteronomy as being from "the book of Moses" (2 Chronicles 25:4). The Jewish philosopher Philo, the Jewish historian Josephus, and New Testament writers (see Matthew 19:7-8 and Acts 15:1), all first century C.E. sources, assumed the Torah's Mosaic authorship, as did the Babylonian Talmud (see Baba Bathra 14b).  of development

2.  Indirect revelation through Prophets.

Heb 1:1  God, who at sundry times and in divers manners spoke in time past to the fathers by the prophets,
Peter 1:20-21 says, "Knowing this first, that no prophesy of the scripture is of any private interpretation.  For the prophesy came not in old time by the will of man; but the holy men of God spoke as they were moved by the Holy Ghost."

Do not believe every prophet

Since these spiritual dimensions are beyond normal experimentations, we are specifically warned of the errors that can crop in.

"Beloved, believe not every spirit, but try the spirits whether they are of God: because many false prophets are gone out into the world" (1John 4:1).

The uncertainity in the field is exploited by some.

The test of whether or not a prophet is a True Prophet is based upon how consistent they are to the two pillars - Moses and Jesus.
"To the law and to the testimony: if they speak not according to this Word, it is because there is no Light in them" (Isaiah 8:20).

Prophecy should be consistent with Scripture because  "Scripture cannot be broken" (John 10:35).  "Search the Scriptures; for in them ye think ye have eternal life: and they are they which testify of Me" (John 5:39).

We may misunderstand Scripture or a prophecy, but that does not diminish the value of that Scripture or prophecy.

Discerning the Prophets

The following passages gives us a Biblical framework to identify a false prophet.

Deu 13:1  If there shall arise among you a prophet, or a dreamer of dreams, and give thee a sign or a wonder.

Deu 13:2  And the sign or the wonder shall come to pass, of which he spoke to thee, saying, Let us go after other gods, which thou hast not known, and let us serve them;

Deu 13:3  Thou shalt not hearken to the words of that prophet, or that dreamer of dreams: for the LORD your God proveth you, to know whether ye love the LORD your God with all your heart and with all your soul.

Deu 13:4  Ye shall walk after the LORD your God, and fear him, and keep his commandments, and obey his voice, and ye shall serve him, and cleave to him.

Deu 13:5  And that prophet, or that dreamer of dreams, shall be put to death; because he hath spoken to turn you away from the LORD your God, who brought you out of the land of Egypt, and redeemed you from the house of bondage, to thrust thee out of the way which the LORD thy God commanded thee to walk in. So shalt thou remove the evil from the midst of thee.

Deu 18:20  But the prophet, who shall presume to speak a word in my name, which I have not commanded him to speak, or that shall speak in the name of other gods, even that prophet shall die.

Deu 18:21  And if thou shalt say in thy heart, How shall we know the word which the LORD hath not spoken?

Deu 18:22  When a prophet speaketh in the name of the LORD, if the thing doth not follow, nor come to pass, that is the thing which the LORD hath not spoken, but the prophet hath spoken it presumptuously: thou shalt not be afraid of him.

Thus signs and wonders are not the criteria of a true prophet.  Even when the prophecy is not fulfilled as in the case of Jona, that prophet do not become a false prophet.  False prophets are only those who pretend to be prophets and do not hear from God and those who prophecy in the name of other gods and take the people to other gods.

A thing prophesied by the prophet need not come to pass because, the very event of the prophecy can change the course of future. Prophecy is one of God's way of intervening and directing the course of history - intervening to save what is evidently sliding away to death and destruction.  Prophet is not simply an observer, he is also an active ingredient - a catalyst - in the process to retard decay and accelerate salvation.   In this sense prophets are not communicating God's predetermined events of history, but God is trying to change the course of events.  In this every person who is created in the image of God has a function and a say.  This is also the justification for including the Writings – the Wisdom Literature in the Scripture.

Former and Latter Prophets

Former Prophets  Joshua  Judges  1 and 2 Samuel  1 and 2 Kings

Latter Prophets  Isaiah  Jeremiah  Ezekiel 

The Twelve: Hosea, Joel, Amos, Obadiah, Jonah, Micah, Nahum, Habakkuk, Zephaniah, Haggai, Zechariah, Malachi

3.  Writings or Kethubhim
 
Apart from this direct revelations, there are also general revelation through the life of people as experienced in daily life.  These form the wisdom literature. These are the wisdom of the ages. They have validity in so far as it is the sum and essence of the experience of the people of God.

Wisdom literatures are expressions of the direct experience of God by individuals and communities.  Their validity as a scripture came through its historical proofing.  It is in this area where we have undefined boundaries.  Very often secular literature also tend to be considered as scripture.  Spurious and  Psuedo or False writings also  vie for scriptural standards.

Thus we have the books of Rabbinic canon according to three broad classifications:
The Torah (Law)--God expressed commandments
The Prophets-- helps to interpret theTorah in terms of the particular situation.
The Writings-- are interpretations of Torah by wise people in their everyday life.

Problem of Transmission

The transmission of the written and oral traditions are also important since the integrity of the content depends on it. 

We should imagine that the concepts that God tries to transmit are spiritual in nature and are not easily discernible to unspiritual minds. The first problem for God is to encode the message in either written or oral code in a given language constraints in a given culture. Since language is in created by man and its symbols have meaning only within the culture, it has its limitations of expressions.    Those who are involved in bible translations are very aware of this. This was achieved in Hebrew language and within the Hebrew culture.  Even when this is done to the best the receiver will selectively receive what is understandable to each receiver and will transmit those that are of interest to them.  Thus there will be several collection of varied selectively transmitted messages out of which we will have to codify the final document by merging them to a unified form.  This is exactly what is happening in the Scripture formation.  Other writings will compete with the actual transmissions for authenticity.  There have been many documents claiming to have been written by eminent prophets and people of God in order to push some specific ideas and concepts.  These are to be eliminated. 

In the Old Testament these selective transmissions are traced by critics as Yahwist (J), Elohim (E), Preistly (P) and Deutronomist (D) traditions. All these converged and culminated in the present Torah. In the early days there was a rather wild trend to splitting up the sources still further, so that J1, J2 and J3, E1, E2, S, L, etc have been proposed.  The Book itself claims that Moses kept written records (Ex 17:14, 24:4, 34:27-28, Num 33:2 and Deut 31:9, 24-26).  However we do not have those original records.  So they were copied and copied over by others with selections and for particular purposes which could form the sources referred here.

http://www.the-sandcastle.com/sheila/Arguments%20Against%20Old%20Testament%20Literalism.doc

http://www.cresourcei.org/jedp.html

http://ccat.sas.upenn.edu/rs/2/Judaism/jepd.html

CRITERIA FOR CANONICITY IN THE OLD TESTAMENT

Until the time of dispersion there never was a formal cannon.  They were in the process of formation. Cannon was established by tradition. So we can see that  Ten Commandments was  written on stone (Deuteronomy 10:4, 5). Moses' Laws, were written in a book (Deuteronomy 31:24-26). Copies of this book were made (Deuteronomy 17:18) regularly. Hebrews believed that Yahweh himself wrote some of the laws (Exod. 24:12; 31:18; 32:16-16; 34:1), and that those written by Moses were dictated by Yahweh (Exod. 34:27).Shechem covenant were written and "the book of the law of God" was deposited in Yahweh's sanctuary (Josh. 24:26).

Joshua added to the book (Joshua 24:26) . Samuel wrote in a book, and laid it up before God (I Samuel 10:25) which was known 400 years later (II Kings 22:8-20) . Prophets also wrote in books (Jeremiah 36:32; Zechariah 1:4; 7:7-12) . Prophecies were preserved by the disciples of the prophets (Isa. 8:16; Jer. 36)
http://www.infidels.org/library/modern/gerald_larue/otll/chap31.html

Only after the dispersion Jews felt the need of a formal cannon.  This was done at the time of the return under Ezra and Nehemiah from the Babylonian captivity around 425 B.C  Ezra read this book of God publicly (Ezra 7 :6; Nehemiah 8: 5) which was the collection of such books that were made by Moses, Judges, Kings and Prophets.   Later during the intertestament period at the time of  Judas Maccabeaus   an "official cannon" was  deposited in the Temple.   The Hebrew speaking Jews divided the twentifour  books into three divisions: 
the Law  containinf the Five books of Moses (Pentateuch); 
the Prophets  containing the four former prophets  and four latter prophets,
 and the Writings containing eleven  books).

The Sadducees did not accept Daniel as Dan 12:2 supports resurrection which they denied (Mark 12:18).  Daniel was always a book questioned by many scholars.

Samaritans, accepted only  Pentateuch.

for different bible canons see http://gbgm-umc.org/umw/bible/canon2.stm
Thomas Ross Valentine tabulates these comparison as follows:

Notes:

1. Anaginoskomena Books variously rendered in English as 'Non-canonical books', 'Ecclesiastical Books', or even 'the Apocrypha' (see additional comments at bottom)
2. labelled deutrocanonical (literally, second canon)
3. excludes sections labelled "The Rest of the Book of Esther" (a.k.a. "Additions to Esther")
4. excludes (1) The Song of the Three Children, (2) Daniel and Susanna, and (3) Daniel, Bel, and the Snake [Dragon]
5. always in appendix

Septuagint (LXX) 250 BC

 http://students.cua.edu/16kalvesmaki/lxx/

The King of Egypt Ptolemy (Philadelphus II [285–247 BCE]), when he made the Library of Alexandria wanted to place the Scriptures of Hebrews in it.  He asked the High Priest of the time , Eleazar to provide a set of the Hebrew Scriptures.  He sent an ornated book with 72 scholars – 6 from each tribe - to help translate it into Greek.  According to the Letter of Aristeas these scholars translated the Pentateuah in 70 days.   However we have practically no reliable documentation which establish the content and extent of the book as a whole.  The name Septua comes from the Greek word Seventy.  There are no copies of the LXX of any period close to the time it originated.     Additional books were added to the 5 books eventually to complete  Hebrew canon of 39 books.  

Wherever Christianity spread, translations of the Hebrew Scriptures were made based on the LXX.  Arabic, Ethiopic, Armenian, Old Latin, Coptic, Georgian, and Old Church Slavonic. translations are directly taken from LXX .  However  the Syriac version [known as the Peshitta],  was translated directly from Hebrew, or from St. Jerome's Latin translation, which is also based on the Hebrew.

Jesus

In Luke 24:44, Jesus refers to "the law of Moses, the prophets, and the psalms" - again, showing that while the first two sections seem to be stable, the third section has not yet been clearly defined; and as yet, there is no clear evidence of a "closed" canon for all three sections.

Council of Jamnia- 90 AD

The rabbis meeting in Jamnia selected twenty-four books to be included in the Palestinian Hebrew Scriptural cannon.  These are the thirty-nine books  which today form part of   the Protestant Old Testament: 

Genesis, Exodus, Leviticus, Numbers, Deuteronomy (the Pentateuch); Joshua, Judges, Ruth, 1 Samuel, 2 Samuel, 1 Kings, 2 Kings, 1 Chronicles, 2 Chronicles, Ezra, Nehemiah, Esther (the Histories); Job, Psalms, Proverbs, Ecclesiastes, Songs (Wisdom Literature);  Isaiah, Jeremiah, Lamentations, Ezekiel, Daniel, Hosea, Joel, Amos, Obadiah, Jonah, Micha, Nahum, Habbakkuk, Zephaniah, Haggai, Zechariah, and Malachi (Prophets).)

 In Alexandria, the rabbis of the Greek-speaking Jews accepted additional books into their cannon: 

1 and 2 Maccabees, Tobit, Judith, Sirach, Wisdom, and Baruch, 3 Ezra, as well as additional parts of Esther and Daniel (such as Bel and the Dragon). These books were included in the Septuagint and are known by Protestants as the apocrypha.

Josephus'   Contra Apion . 93-95 AD.
 

The Jewish historian Josephus wrote (c. 90 CE) that Jews recognized 22 books, divided in three divisions: 5 books of Moses, 13 books of the Prophets and the remaining 4 books.  The numbers are differing to some extent because of they did not distinguish between volumes of Kings, Chronicles etc.  According to Josephus the Canon was restricted.   “From the death of Moses until Artaxerxes...the prophets who followed after Moses recorded their deeds in thirteen books. The remaining four comprise hymns to God and rules of ethical conduct for men”.
 
Josephus thus limits his books to those written between the time of Moses and Artaxerxes - which is to say, the time of Ezra, Nehemiah, Malachi, Zecharaiah, and Haggai. After that, Josephus observed that "(Jewish) history hath been written since Artaxerxes very particularly but hath not been esteemed of the like authority with the former by our forefathers, because there hath not been an exact succession of prophets since that time." 

"...the Holy Spirit departed after the death of Haggai, Zecharaiah, and Malachi. Thus Judaism defined the limits of the canon that was and still is accepted within the Jewish community."  .

Thus all literature written after Malachi do not form part of Scripture.

 For a detailed reading of the Jewish canonical concept see the article in the Jewish Encyclopedia: