One hypothesis posited to address these apparent discrepancies (See Introduction) is the interpretive system called Dispensationalism. The word dispensation comes from the Greek word for “house law.” The idea is the way someone manages his household affairs or the affairs of another. During the time the Bible was written, the household included the business or trade that one was involved in. It would include livestock, crops, orchards, and even servants, slaves, and children. It was commonly understood as management or stewardship.
Jesus, in relating a parable to his disciples, uses the word, dispensation, in this sense. In Luke 16:1-4, Jesus begins the story like this: “There was a rich man who had a manager, and charges were brought to him that this man was wasting his [the rich man’s] possessions. And he called him and said to him, ‘What is this that I hear about you? Turn in the account of your management, for you can no longer be manager.'” The word translated management is the Greek word for dispensation. In this parable, the way in which the manager was managing the affairs of the rich man were dishonest. That is, his dispensation was characterized by dishonesty.
As is often the case in the Bible, an author takes a common word and adds to it a theological meaning. Many examples can be pointed to. The writers of the Psalms frequently pray for salvation. Salvation in this sense means physical deliverance. The New Testament writers use the same word giving it theological significance. Other words can be mentioned: pastor—originally shepherd; deacon—originally waiter; church—originally general assembly.
The same is true of the word dispensation. The Apostle Paul uses the word in a theological context in Ephesians 3:9, where the ESV translates it as plan. In the context, Paul is writing about how the Church is something new, not something revealed in the Old Testament. Beginning in Eph. 3:8 he states, “To me, though I am the very least of all the saints, this grace was given, to preach to the Gentiles the unsearchable riches of Christ, and to bring to light for everyone what is the plan of the mystery hidden for ages in God who created all things.”
So, how is Paul using the word plan? It is clearly not in the common usage as in Luke 16. If it is a theological usage, what is Paul communicating? It appears, taking both Eph. 3:9 and Eph. 1:9 into account, that during the time of the Law, God had one way of managing the affairs of mankind, while during the Church, he has another. The theological meaning, then, is the Divine Management or the Divine Rule of the affairs of mankind. What characterizes God’s management?
Charles Ryrie is probably the most articulate Dispensationalist of late. He defines a dispensation as a “Distinguishable economy in the outworking of God’s purpose.” This definition is succinct, but it has one weakness. The word economy makes most people think of money and not function, as it is used in theological studies. For this reason, management may be a more fitting term. The adjective which Ryrie employees, distinguishable, is important. As one reads through the Bible, he is able to tell when one dispensation ends and the next one begins. God communicates each change to mankind so that man knows his responsibilities during any given management system. This review of Ryrie’s definition, together with the discussion on the theological usage, lead this author to this definition of a dispensation: “a dispensation is the way in which God manages the affairs of men on earth.”