http://en.wikipedia.org/wiki/Dispensationalism
In the context of Christianity, dispensationalism is an interpretive, or narrative framework for understanding the overall flow of the Bible, and is frequently contrasted with an opposing interpretation: supersessionism, also referred to as Covenant Theology, see also New Covenant theology. In simple terms, supersessionism teaches that the Christian Church has been established for the salvation of "the Jews first, and also to the Gentiles", and that there is one people of God joined in unity through Jesus Christ. Since the Jews have largely refused to accept Jesus as Christ, "the Messiah of Israel", and since he is their only means of salvation, those individual Jews that reject him, reject the merits of his atoning sacrifice for sins, and have in effect rejected the only provision God has offered for divine forgiveness, therefore they no longer are the true Israel, and Christians have become the "New Jews". This view is also often referred to as "replacement theology"; in that according to this theology, the Church from its very inception has replaced the Jewish people and National Israel as God's "chosen people" and "holy nation", now and forever. One of the scriptures often cited as a basis for this theology is 1 Peter 2:9.
In contrast, dispensationalism teaches that the Christian Church is a "parenthesis" in God's dealings with the Jews, when the Gospel began to go to the Gentiles instead of the Jews, but that God's continued care for the Jews will be revealed after the Church Age (or Dispensation), when the Jews will be restored to their land, and will accept Jesus as their Messiah. Hence, dispensationalists typically believe in a Jewish restoration.