Covenant theology (also known as Covenantalism or Federal theology or Federalism) is a conceptual overview and interpretive framework for understanding the overall flow of the Bible. It uses the theological concept of covenant as an organizing principle for Christian theology.
The standard description of covenant theology views the history of God's dealings with mankind in all of history, from Creation to Fall to Redemption to Consummation, under the framework of three overarching theological covenants — the covenants of redemption, of works, and of grace. These three covenants are called theological because they are not explicitly presented as such in the Bible but are thought to be theologically implicit, describing and summarizing the wealth of Scriptural data. Within historical Reformed Christian systems of thought, covenant theology is not merely treated as a point of doctrine, neither is it treated as a central dogma. Rather, Covenant is viewed as the structure by which the biblical text organizes itself.
As a framework for biblical interpretation, covenant theology stands in contrast to dispensationalism in regard to the relationship between the Old Covenant with national Israel and the New Covenant in Christ's blood. That such a framework exists appears to be, at least, feasible since, from the earliest time of the Church, the Jewish Bible has been known as the Old Testament (or Covenant) in contrast to the Christian addition which has been known as the New Testament (or Covenant). Regarding the theological status of modern day Jewish people, covenant theology is often referred to as "supersessionism," or "replacement theology" by its detractors, due to the perception that it teaches that God has abandoned the promises made to the Jews and has replaced the Jews with Christians as his chosen people in the earth. Covenant theologians deny that God has abandoned his promises to Israel, but see the fulfillment of the promises to Israel in the person and the work of the Messiah, Jesus of Nazareth, who established the church in organic continuity with Israel, not a separate replacement entity.
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