William MacDonald emphasizes the importance of understanding the different dispensations in God's dealings with humanity throughout history. He explains that while God's nature remains unchanged, His methods of administration vary, distinguishing between the Law and Grace. MacDonald illustrates this with biblical examples, highlighting how the context of God's instructions shifts with each dispensation, ultimately leading to the realization that salvation has always been through faith in Christ. He encourages believers to recognize their position in Christ and the implications for their daily practice, urging them to live in accordance with their identity as children of God.