From this web page:
Dr. Scofield defines a dispensation as a period of time during which man is tested in respect of obedience to some specific revelation of the will of God. He teaches in the Scofield Bible that there are Seven Dispensations: (1) The Dispensation of Innocency: before the Fall; (2) The Dispensation of Conscience: before the Flood; (3) The Dispensation of Human Government; (4) The Dispensation of Promise: from the calling of Abraham until Mt. Sinai; (5) The Dispensation of the Law: from Mt. Sinai to the cross of Christ; (6) The Dispensation of Grace: from the cross of Christ to the Second Advent; (7) The Dispensation of the Kingdom: the Millennium.
In a sense, the word dispensation can be used somewhat interchangeably with the word covenant, provided we change Dr. Scofield's inclusion of the words "a period of time" (which are found in his definition of what exactly constitutes a dispensation) to perhaps the expression "an economy in the outworking of God's purposes for humankind." In that sense, Christ on the night in which he was betrayed announced a new economy (or covenant, or testament) which superseded the old. Rather than the blood of animal sacrifices being the means whereby people could receive temporary forgiveness for sins, the blood of the Lamb of God shed at Calvary would become forever the basis for sin's forgiveness.
In the same way, he took the cup [of salvation] after the meal and said, “This cup is the new covenant by my blood, which is poured out for you" (Luke 22:20 CEB, my emphasis).
The Old Covenant certainly pointed to the New Covenant in type-to-antitype fashion, but the New superseded the Old, a truth the writers of Hebrews and Galatians took great pains to explain.
Dr. Scofield would likely turn over in his grave if he knew how his suggested outline of biblical history has been twisted, distorted, and maligned in modern times. We moderns tend to think our being moderns makes--ipso facto--our methods of "rightly dividing the word of truth" somehow superior to the methods of previous generations.
I may be wrong, but I think if Dr. Scofield were alive today, and someone were to ask him if the way he assigned different dispensations to the stages through which God revealed progressively himself and his will and word to his creatures was "Gospel truth," he would likely say, "God forbid!" Moreover, I'd like to think he himself would ask a follow-up question of someone who challenged his dispensational methodology; namely, "Do you yourself have a better method in mind?" In which case, he would likely listen patiently and humbly to his interlocutor's explanation.
As with those who espouse covenant theology, dispensationalists recognize the sui generis nature of God's word, the Bible. Part of the Bible's uniqueness derives from what has been called "the analogy of Scripture." Although in itself somewhat controversial, this concept has been embraced by Bible scholars down through the centuries.
Martin Luther, for example, expressed this principle with the words, Scriptura sui ipsius interpres--Latin for “Scripture is its own expositor.” In like manner, the Westminster Confession of Faith affirmed, “When there is a question about the true and full sense of any Scripture . . . it must be searched and known by other places [in Scripture] that speak more clearly.”
Now exactly how this unity is interpreted has varied from tradition to tradition, from denomination to denomination, and even from Christian to Christian, ever since the canon of Scripture was closed! Going back to the verse above, from which I quoted an excerpt,
Study to shew thyself approved unto God, a workman that needeth not to be ashamed, rightly dividing the word of truth (2 Timothy 2:15).
Just as there is unity within diversity in holy writ, there is I suggest a unity within diversity in the various ways sincere students of the word in every generation "rightly . . . [divide] the word of truth."
Is there truth in Dispensationalism? Of course there is. Is there truth in Covenant theology? Of course there is. Does either of those two methods encapsulate all of God's truth? Of course not. As the apostle Paul said so eloquently,
Charity never faileth: but whether there be prophecies, they shall fail; whether there be tongues, they shall cease; whether there be knowledge, it shall vanish away. For we know in part, and we prophesy in part. But when that which is perfect is come, then that which is in part shall be done away. When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things. For now we see through a glass, darkly; but then face to face: now I know in part; but then shall I know even as also I am known (1 Corinthians 8-12 KJV, emphases are mine).
In other words, every method of explaining the unity of Scripture in some all-encompassing way is bound to fall short. That there is unity, however, in the ways in which the saints, past and present, chose to explicate the unity of Scripture, speaks to me of both the inexhaustible ways and the variety of ways in which God communicates to us through the ministers of his living and abiding word.
Of course, there are doctrinal lines which must not be crossed, and here we can look to the decisions made by some of the great councils of the past for guidance; for example, the First Council of Nicaea (C.E. 325).
In conclusion, is there only one way to express the truth of the unity of Scripture? Of course not. Why, then, do we tend to cling so tenaciously to one particular methodology of interpreting God's word of truth over another method, refusing to grant other believers who espouse a different paradigm the liberty to do so? In light of the controversies and the attendant polarization surrounding the debate between dispensationalists and covenant theologians, the latter of whom accuse the former of "replacement theology," I invoke the following wise words:
"In essentials, unity. In non-essentials, liberty. In all things, charity."