Covenant theology (also known as covenantalism, federal theology, or federalism) is a biblical theology, a conceptual overview and interpretive framework for understanding the overall structure of the Bible. It is often distinguished from dispensational theology, a competing form of biblical theology. It uses the theological concept of a covenant as an organizing principle for Christian theology. The standard form of covenant theology views the history of God's dealings with mankind, from Creation to Fall to Redemption to Consummation, under the framework of three overarching theological covenants: those of redemption, of works, and of grace.
Covenentalists call these three covenants "theological" because, though not explicitly presented as such in the Bible, they are thought of as theologically implicit, describing and summarizing a wealth of scriptural data. Historical Reformed systems of thought treat classical covenant theology not merely as a point of doctrine or as a central dogma, but as the structure by which the biblical text organizes itself. Covenant theology is upheld by Christians of the Reformed tradition, including the Continental Reformed, Presbyterian, Congregationalist, Reformed Baptist, and Reformed Anglican traditions. The most well-known form of Covenant Theology is associated with Presbyterians and comes from the Westminster Confession of Faith. A variant of this traditional Presbyterian form is sometimes called Baptist Covenant Theology or 1689 Federalism, to distinguish it from the standard covenant theology of Presbyterian Westminster Federalism. It is usually associated with the Particular Baptist strand and comes from the Second London Confession of Faith of 1689. Methodist hermeneutics traditionally use a variation of this, known as Wesleyan covenant theology, which is consistent with Arminian soteriology.
