These are the most prevalent systems used by conservative Christian theologians, pastors, and teachers for the purpose of viewing, organizing, systematizing, interpreting, teaching, and understanding the Bible.
It is valuable to recognize that the development and refinement of these two systems has primarily occurred in the last 300 to 400 years. As a theological system, Covenantalism predates Dispensationalism. However, proponents of both views purpose to exhibit historical evidence showing that central concepts of these systems were held early and throughout the history of the church.
Both dispensationalism and covenantalism depend on assumptions or presuppositions that some people find difficult to reconcile with Scripture [Even though everyone must do it]. So, where both systems have fundamental truths in their system, they also both have their fair share of theological "constructs" and "necessary consequences" that make them controversial to some. Both terms -- covenant and dispensation -- are bible words.
For a fuller explanation see -- Covenant Theology or Dispensational Theology in the Bible Section