Dispensationalism is a theological system that teaches the literal interpretation of Bible prophecy, recognizes a distinction between Israel and the Church, and organizes the Bible into different dispensations or administrations.

In theology, a dispensation is the divine administration of a period of time, a divinely appointed age. Dispensationalism is a theological system that recognizes ages ordained by God to order the affairs of the world. Dispensationalism has two primary distinctives: 1) a literal interpretation of Scripture, especially Bible prophecy, and 2) the belief that Israel and the Church each involve separate programs by God. Classical dispensationalism identifies seven dispensations in God’s plan for mankind.

Dispensationalists believe the Bible is organized into seven dispensations: Innocence (
Genesis 1:1—3:7), Conscience (Genesis 3:8—8:22), Human Government (Genesis 9:1—11:32), Promise (Genesis 12:1Exodus 19:25), Law (Exodus 20:1Acts 2:4), Grace (Acts 2:4Revelation 20:3), and the Millennial Kingdom (Revelation 20:4–6). These dispensations are ways in which God relates to man. 

Each dispensation includes a way by which God worked with people living in that specific dispensation. That pattern he worked with people is 1) a given responsibility, 2) failure of the given responsibility 3) a judgment which follows failure, and 4) the grace to move on.

Dispensationalists believe in a literal interpretation of the Bible as the best method of interpretation. A literal interpretation gives each word the meaning it would have in everyday usage. Exceptions are made for symbols, figures of speech, and types. However, symbols and figurative sayings have literal meanings behind them. For example, when the Bible speaks of “a thousand years” in Revelation 20, dispensationalists interpret it to mean a literal period of 1,000 years.

Dispensational theology teaches that there are two separate people in God's biblical plan, Israel and the Church. Dispensationalists believe the Church has not replaced Israel in God’s biblical plan. They also the Old Testament promises to Israel have not been transferred to the Church. They believe the promises God made to Israel in the Old Testament (for land, many descendants, and blessings) will be fulfilled in the 1000-year Kingdom era revealed in Revelation 20. Dispensationalists believe God is currently focusing His attention on the Church. In the near future his focus focus will once again be on Israel (refer to Romans 9–11 and Daniel 9:24).