The Literal/Historical/Grammatical Hermeneutic
The following is taken from Shield of Faith, and has full permission to be mirrored here since both sites are owned and operated by the same person.
By literal, we mean that unless there is a compelling reason to allegorize or spiritualize a passage, it should be taken as written. This is the opposite of interpretation according to preconceived beliefs. For example, if one wishes to see whether the Bible treats miracles as actual events or simply as moral lessons, one examines the text to see whether the writer is teaching or simply reporting. On the other hand, if one has already decided that miracles are impossible, then that person would be forced to interpret accounts of miracles as moral lessons, without regard for the context. And when we consider the fact that the Christian faith hinges upon a colossal miracle, the resurrection of Jesus from the dead, an a priori disbelief in miracles is wholly incompatible with the Christian faith.
What literal does not mean is to ignore figures of speech, analogies, or genre. If, for example, we read that we are to be salt and light, the literal hermeneutic does not teach that we must become pillars of salt or oil lamps. Yet when we read that Jesus rose physically from the dead, we take it as stated since it is in the context of eyewitness testimony rather than analogy or a spiritual teaching. This distinction becomes critical at such points as when Jesus told his disciples that the bread and cup were his body and blood. It is equally critical when we read prophecy.
By historical, we mean that a passage must be considered in its context, which includes not only the writer and subject, but also the language, culture, era, and particular circumstances. We must also establish the fact that the Bible is not to be dismissed as historical record, simply because it's the Bible. All historical accounts are subject to the prejudices and cultures of the historians, who are all fallible human beings. A historian writing about science can be every bit as mistaken or agenda-driven as any theistic writer. So the prudent student of history will consult many historians, many records, and take them as a whole. The character of the historian is of the utmost importance, because even the most erudite prose is worthless as historical record if it omits pertinent data or twists facts.
By grammatical, we mean that one must have a good grasp of the language of a writing. In ancient times, there were far fewer people writing at all, so there was a greater degree of consistency in a given era. But languages are always in flux, so the style of writing or use of grammar is one of the clues used by analysts to determine the approximate date of a document. So we must consider the meanings of words as they relate to other words around them, the style of the writer, the general style of the time, and of course the topic; words are not written in a vacuum.
The careful exegete will consider all of these factors together, and this requires a lot of time and effort. Much time is wasted debating various Biblical issues due to the fact that people are not all using the same hermeneutic. If one uses the lit. / hist./ gram. method, while another considers all of scripture to be moral lessons, they will never reach any agreement or understanding, with each side wondering how the other can be so blind. On more focused topics such as prophecy or Christian living, the views of each side concerning various groups such as Jews, Gentiles, and Christians will determine whether they can discuss the topics at all. They must first come to agreement on the foundational presumptions before a discussion of details can begin.