Dispensationalism is a religious interpretive system and metanarrative for the Bible. It stands in contrast to the previous traditional system of Reformed covenant theology used in biblical interpretation following the Reformation era. It wound up displacing the previous dominance of the covenantal method of biblical interpretation. It's origins trace back to John Darby who systematized this theology in the mid 1800s and made it popular with the help of J.I. Scofield and his study bible. Prior to this date it did not exist, yet now it is the predominant theology among evangelicals. Tragically, most have no idea of its origin.
Darby's hermeneutic for Bible interpretation started with the presupposition that there is a distinction between the Israel and the church. He then interpreted all of scripture based on that premise. Dispensationalism teaches that biblical history is divided by God into dispensations, which are defined as periods of time or ages in which God has established distinct administrative principles for a certain group of people to live by. According to dispensationalism, each era of time, or a dispensation of God's plan, is administered in a certain prescribed manner. The people in that era of time, or dispensation, are responsible to live according to the rules God established for them during that time span. Dispensationalists' start with the presupposition that human reasoning reveals biblical history has a record of discontinuities in the way that God relates to humans and their free wills.
One result of Darby's hermeneutical approach to scripture is that is sets up many dualistic dichotomies in scripture. The Bible is divided up very sharply into administrative applications for specific people for only the specified period within a dispensation of time. For example, law and grace are described as polar opposites. The Old Testament and God's law only applies to the Jews - never to Christians and the church. As a result, some teachers who advocate this view teach that Christians are to "unhitch" themselves from any reference to the Old Testament and God's law, which includes the Ten Commandments. This totally undermines the traditional view regarding the three uses of the law that followed in the wake of the Reformation and were made a part of the Westminster Confession. The moral laws of God in the Old Testament served as the basis for the common law system that developed in England and was later transplanted in America.