Wikipedia
Covenant theology (also known as Covenantalism, Federal theology, or Federalism) is a Calvinist conceptual overview and interpretive framework for understanding the overall flow of the Bible. 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: of redemption, works, and grace.
These three covenants are called theological because, though not explicitly presented as such in the Bible, they are thought of as theologically implicit, describing and summarizing the wealth of Scriptural data. Historical Reformed systems of thought treat 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.
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 (with the house of Israel (Jeremiah 31:31) in Christ's blood). That such a framework exists appears at least feasible, since from New Testament times the Bible of Israel has been known as the Old Testament (i.e., Covenant; see 2 Cor 3:14 [NRSV], "they [Jews] hear the reading of the old covenant"), in contrast to the Christian addition which has become known as the New Testament (or Covenant). Detractors of covenant theology often refer to it as " supersessionism" or as "replacement theology", 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 on 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 as a separate replacement entity. Many covenant theologians have also seen a distinct future promise of gracious restoration for unregenerate Israel.