Sitz im Leben

In Biblical criticism, Sitz im Leben () is a German phrase roughly translating to "setting in life". It stands for the context in which a text, or object, has been created, and its function and purpose at that time. The "Sitz im Leben" is also used to refer to the social, ethnic and cultural setting of a site at a particular era. When interpreting a text, object, or region, the "Sitz im Leben" has to be taken into consideration in order to allow a proper contextual interpretation. 
Origins.
The term originated with the German Protestant theologian Hermann Gunkel. The term "Sitz im Volksleben" ("setting in the life of the people") was employed for the first time in 1906 and the term "Sitz im Leben" in 1918. The term "Sitz im Leben" was used by classic form critics, as pointed out by Chris Tuckett, "...it has been pointed out that the term "Sitz im Leben" was used in a rather peculiar way by the classic form critics. In fact the term is a sociological one, describing a typical situation within any community" so that the meaning of the text is bound up with its function in the community, and social context. However some have noted that use in Biblical exegesis can be problematic.
Contextualization.
At its simplest, it describes what occasions certain passages in the Bible were written for, and is often called the "genres" of the Bible. Simple examples of "Sitz im Leben" include the classification of material into letters, poems of lament, parables, psalms, and songs. However, "Sitz im Leben" can also involve many other considerations; who the speaker of a passage was, his role in life, the nature of his audience, and so on. Taken out of its original context, the original meaning of a passage is often lost. So for example, a psalm may have its "Sitz" in the ritual of the temple cult, or as an artistic votive offering, or in the sense of injustice arising from a power structure in Jerusalem society, or lament in defeat. A major aim of hermeneutics (contextualizing interpretation) is to uncover such things.
The term is also used to describe the contextual interpretation of archaeological artefacts and ancient sites. Only through examining the historical context can one properly interpret them.
Development.
Today the term is also used outside theological research, when it is needed to examine a text for its sociologically relevant aspects. For example: the "Sitz im Leben" of a counting rhyme like "eeny, meeny, miny, moe" is a group of children deciding among themselves who will play in a game; when the children chant the song, we know that they are choosing who will play, but if we are unaware of this context, the rhyme appears merely to be nonsense about toes.
In linguistics the "Sitz im Leben" is determined by the text pragmatics.