Dispensational theology refers to the unified teachings of Dispensationalism that address what other views teach as divergent theologies in the Old Testament and New Testament. Its name reflects a view that biblical history is best understood as a series of dispensations, or separated time-periods, in the Bible.
Each dispensation is said to represent a different way in which God deals with man. Some writers also believe that it also involves a different testing of Man. "These periods are marked off in Scripture by some change in God's method of dealing with mankind, in respect to two questions: of sin, and of man's responsibility," explained C. I. Scofield. "Each of the dispensations may be regarded as a new test of the natural man, and each ends in judgment—marking his utter failure in every dispensation."
The newest deception is that of denying the truth of replacement theology, which is well verified in the scriptures. Dispensationalism is not correct as a theological explanation and should be discarded. These two theologies are closely related in that both deal with the seed of Abraham (literal Israel) and spiritual Israel (the church). Dispensationalism teaches that God had two plans, one for the Jews (literal Israel) and one for Gentiles (the Church), but this is not true. Replacement theology teaches that God Replaced the literal seed of Israel with the spiritual seed of Israel, which in fact is the case see Matthew 21:33-46. These verses clearly teach that God has taken his Kingdom from literal Israel and given it to the Church see Matthew 21:43. Therefore Replacement theology is credible as a theological explanation of these events. Dispensationalism however was not Gods plan as literal Israel should have entered into the body of Christ which is the Church. Dispensationalism teaches that God has a distinct plan for literal Israel and spiritual Israel but in reality the plan was the same, to be heirs to the Kingdom of God through faith in God. Basically all mankind, both Jew and Gentile, must be grafted into the branch which is Jesus Christ the head of the Church. Replacement theology does not so much take away anything from the Jews (literal Israel) as anyone living during Christ's time until today can become heirs to the Kingdom of God through faith in Christ; as it is a way of understanding to whom the promises made by God to Israel, both literal and spiritual, will be fulfilled. Jesus made those promises and is prepared to fulfill them to the righteous and faithful of (literal) Israel before the time of Christ as well as the righteous and faithful (spiritual) Israel after the time of Christ. On the other hand God does not fulfill the blessed promises to a Jew simply because of a traceable bloodline to Abraham nor to a Christian simply because of Church membership. The promises are given to the righteous, and only God chooses them, not to a certain race of any type. For God is not a respecter of persons, He created two Adam and Eve, and through them we all have life as children of God.
Dispensation is used four times in the scriptures as follows with Strong number 3622 which is the Greek word Oikonomia, which means the stewardship or administration of a household. God gave this stewardship (dispensation) in trust to the Apostle Paul and gave him tremendous sacred secrets that were hid in God until revealed to the Apostle Paul. The sacred secrets is the Greek word musterion, which means to shut the mouth, as in secret religious societies. Musterion is transliterated, not translated, as transliterated is when you take the Greek letters (musterion) and just bring them into another language, which is what the translators did and rendered the English word "mystery" as used 27 times in the New Testament.
God does not want the revelation and understanding of the sacred secrets that were revealed to Paul to remain a mystery or a secret, as stated in Romans the Postscript of chapter 16:25...
Now to him that is of power to stablish you according to my gospel, and the preaching of Jesus Christ, according to the revelation of the mystery, which was kept secret since the world began, 26 But now is made manifest, and by the scriptures of the prophets, according to the commandment of the everlasting God, made known to all nations for the obedience of faith: 27 To God only wise, be glory through Jesus Christ for ever. Amen. Written to the Romans from Corinthus, and sent by Phebe servant of the church at Cenchrea.
Even during Paul's ministry, everyone turned away from him and the sacred secrets, which is contained in his epistles, and the these most important truths remains a secret for the most part, and neglected for the most part. These divine secrets encompass many subjects, only a few which are generally known and understood, such as the one body of Christ, whether Jew or Gentile etc., these subjects have to do with doctrine, the relationship and headship of The Lord Jesus Christ, the power of the holy spirit (the gift of God) and the amazing truth that beleivers have spiritually Christ in you, the hope of Glory (Colossians 1:27). With the take over of the church leadership by Emperor Constantine, at the point of a sword, Christianity was impailed with a terrible wound including further loss of the musterion (sacred secrets) as revealed by Paul through the revelation of Jesus Christ.
103588 That in the dispensation of the fulness3588, 4138 of times3588, 2540 he might gather together in one346 all things3956 in1722 Christ, 5547, both which are in heaven,, and which are on earth3588, 1093; even in him:
253588 Whereof3739 I1473 am made1096 a minister1249, according to2596 the dispensation3588, 3622 of God3588, 2316 which is given1325 to me3427 for1519 you5209, to fulfil4137 the word3588, 3056 of God3588, 2316;
In simple, easy to understand language:
-- Dispensationalism is:
The literal interpretation of that which was intended to be applied spiritually. -- For example: transubstantiation
Also, there is an entire system of prophetic interpretation known as Dispensationalism -- which system teaches that the modern so-called "State of Israel" will again become, literally, the theocratic/God-ruled nation among the entire planet.
Below, is a link to what I find to be an excellent article concerning Dispensationalism: