The hermeneutic circle (German: hermeneutischer Zirkel) describes the process of understanding a text hermeneutically. It refers to the idea that one's understanding of the text as a whole is established by reference to the individual parts and one's understanding of each individual part by reference to the whole. Neither the whole text nor any individual part can be understood without reference to one another, and hence, it is a circle. However, this circular character of interpretation does not make it impossible to interpret a text; rather, it stresses that the meaning of a text must be found within its cultural, historical, and literary context.
Friedrich Schleiermacher's approach to interpretation focuses on the importance of the interpreter understanding the text as a necessary stage to interpreting it. Understanding involved repeated circular movements between the parts and the whole. Hence the idea of an interpretive or hermeneutic circle. Understanding the meaning of a text is not about decoding the author's intentions. It is about establishing real relationships between reader, text, and context. Even reading a sentence involves these repeated circular movements through a hierarchy of parts–whole relationships. Thus, as we are reading this sentence, you are analysing single words as the text unfolds, but you are also weighing the meaning of each word against our changing sense of the overall meaning of the sentence you are reading, or perhaps misunderstanding, or maybe this sentence is reminding you of, or clashing with, another view about interpretation you have, in the past, advocated or disparaged. Hence we are brought to the sentence's larger historical context, depending on its location, and our own circumstances.
Wilhelm Dilthey used the example of understanding a sentence as an example of the circular course of hermeneutic understanding. He particularly stressed that meaning and meaningfulness were always contextual. Thus the meaning of any sentence cannot be fully interpreted unless we know the historical circumstances of its utterance. And this means that interpretation is always linked to the situation of the interpreter, because one can only construct a history from the particular set of circumstances in which one currently exists. Thus Dilthey says: "Meaningfulness fundamentally grows out of a relation of part to whole that is grounded in the nature of living experience." For Dilthey, "Meaning is not subjective; it is not projection of thought or thinking onto the object; it is a perception of a real relationship within a nexus prior to the subject-object separation in thought."