How did the church settle on 27 books in the new testament

Because the other books they threw out didn't say what they wanted them to say to express their agenda.

In the early days of the church, there was a council to vote on which books they wanted to include and which they wanted to discard. There are gospels, epistles, and letters most bible believers have never read because they weren't voted into the bible.

Canon Law is no simple matter.  Let us say that to be included in the Bible, a book has to be:

*Inspired by God.  Is the work the dictation of God to a gifted prophet, seer, or mystic, or is it a clever forgery?  There are numerous tests that will rationally confirm the case, not the least of which is the insight of the scholars who consider the work.

*Applicable to the Hebrew People, the early Church, or the Jewish and/or Christian faith.  Is it a work that we can shape our lives by?  If so, why or why not?

*Understandable.  There are some apocryphal works that were discluded, not because they failed the above two tests, but because we simply could not understand them.  The Book of Enoch and Book of Cardiff are two examples. 

*Accurate.  The work must be of impeccable historicity.  There must have been enough eyewitnesses to verify that the described events actually took place to satisfy ANY court as to their integrity.

*Timely.  Does the work describe events that happened 300 years before it was written?  If so then it may be either spurious or referenced.  If so, then the work is "secondary," hence it does not pass the Canon.  The sole exception to timeliness is Genesis, which necessarily goes back to Creation,  The other four books of the Pentateuch reasonably confirm its authenticity.

*Convincing.  The argument presented in the work must be so logical that no one can gainsay it or fault the conclusion without lying.

There are many other tests, but these tests must all be passed before a work is judged worthy to be included in the Canon of Scripture.

http://www.clsa.org/resource/resmgr/newsletters/1206newsletter.pdf

I have read the Book of Cardiff.  It is an ancient Druidic text believed written  about 775 BCE.  It contains their local history from 1,330 BCE to 775 BCE.  It is unusual in that it makes predictions, some of which were fulfilled on 9-11-2001.  It says that this is the final time before an "age of awakening."

If correct, the next 400 years or so will put us to re-examine of our core values.  Then the end of life on earth, yet they do not say that life will end everywhere.

The early Church would have considered it difficult to understand but it is still in the Vatican archives.  I suppose we will always find God's wisdom beyond our understanding.  The early Church kept the book, in hopes that one day they could make sense of it.  That day has arrived.