Here's another good word, this one on interpreting the Bible 'literally' as he draws out the difference between 'prediction' and 'promise' in the Bible--
In our own day, there are those who look for future fulfillments of OT promises in a manner as literal as the original terms themselves. They expect to see things happening literally in the land of Israel, with a tribal division like Ezekiel describes. From the same prophet, they look for a rebuilding of the temple and reconstitution of the priesthood and sacrificial system. Or a battle between biblically identifiable enemies. Or Gentile nations on actual pilgrimmage to the present physical Jerusalem. Or a revival of the throne of David.--Christopher J. H. Wright, Knowing Jesus through the Old Testament (IVP, 1995), 76-77
There is a wide variety of such interpretations of prophecy held by many sincere Christian people. However, such expectations seem quite wide of the mark. Sometimes they simply make the mistake of taking literally what the Bible always intended figuratively even in its original form. But at other times they fail to see the living and 'transformable' quality of promises which were probably understood quite literally at the time of their giving. Just because the gift turns out to be a motor car doesn't mean we should try to argue that the promise of a horse was only meant figuratively. A horse was meant and a horse was expected. But the changed circumstances and the progress of history enabled the promises to be fulfilled in a different and superior way, without emptying the promise either of its purpose (to give a means of transportation), or of its basis in a relationship of fatherly love.
To expect that all the details of OT prophecies have to be fulfilled literally is to classify them all in the category of flat predictions which have to 'come true,' or be judged to have failed. Certainly . . . the OT did make predictions and they were fulfilled with remarkable accuracy--as in the case of Jesus's birth in Jerusalem. But . . . Matthew's understanding of promise and fulfillment goes way beyond mere prediction. To insist on literal fulfillment of prophecies can be to overlook their actual nature within the category of promise, with the potential of different and progressively superior levels of fulfillment. To look for direct fulfillments of, say, Ezekiel in the 20th-century Middle East is to bypass and short-circuit the reality and the finality of what we already have in Christ as the fulfillment of those great assurances. It is like taking delivery of the motor car but still expecting to receive a horse.
The phrase 'different and progressively superior levels of fulfillment' is particularly worthy of reflection.