We distinguish between theory and methodology. In general terms theory relates to the underlying assumptions from which inquiry proceeds, method relates to the nature of the act of inquiry. For example, the interpretation of a document presupposes certain assumptions on the part of the interpreter, yet the act of reading the text is considered a (necessary) part of the process of interpretation regardless of the underlying assumptions. Exactly how a text should be read is, of course, a matter of debate.
In literary criticism, the term close reading describes, the careful, sustained interpretation of a brief passage of a text. A close reading emphasizes the single and the particular over the general.
Close reading, in one form or another, has been part of the methodology of reading ancient texts since antiquity. Homer, the Twelve Tables, the Bible and the Quran, to name the most important, have been and still are being close read. The term itself comes from 20th century English practice and was pioneered by I. A. Richards and his student William Empson. Close reading then was further developed as a technique by the New Critics of the mid-twentieth century, and so became a fundamental method of modern criticism. In French criticism, close reading is often referred to as explication de texte, as proposed by Gustave Lanson, though the two are not quite the same.
Close reading typically entails a number of activities: multiple readings/viewings of the text; situating the text in its social and historical contexts; deconstructing the text using a variety of critical strategies (from Marxism, feminism, poststructuralism, postmodernism, structuralism, reception theory, psychoanalysis, etc.); bringing to bear what, if anything, everyone else has said about that text. Close reading relies for its success on the expertise of the expert doing it; it is unique, individual, and subjective; it does not follow any disembodied abstract methodology but rather the logic of the scholar-expert in whose hands it is being executed.
"Generally, discourse is defined as text above the level of sentences. Discourse analysts tend to focus on how particular phenomena are represented. For example, ... studied manifestations of racism in the press: how minorities appear, how ethnic conflicts are described, and how stereotypes permeate given accounts. Other discourse analysts have examined how television news programs and other TV shows in the United States manifest a particular ideological vision of the U.S. economy ..." Krippendorff, Klaus. 2004. Content analysis: an introduction to its methodology. Thousand Oaks, Calif: Sage, p.16.
Michel Foucault became one of the key theorists of the subject, especially of discourse. In this context, the term 'discourse' no longer refers to formal linguistic aspects, but to institutionalized patterns of knowledge that become manifest in disciplinary structures and operate by the connection of knowledge and power. Since the 1970s, Foucault´s works have had an increasing impact especially on discourse analysis in the social sciences.
"Discourse is a term associated primarily with Michel Foucault’s archaeological and genealogical investigations into the creation of the human sciences. In his early works, he discusses discursive formations as bodies of writing that constituted knowledge of a particular subject or idea; discourse here is equivalent to archive, or to written records. In his later genealogical works, Foucault examines both discursive and non-discursive practices and how both produce networks of power/knowledge." Klages, Mary. 2012. Key terms in literary theory. London: Continuum, pp. 24-25.
"In our discussion of hermeneutics we shall encounter “the hermeneutic circle”, a phrase meaning that the parts can only be understood from an understanding of the whole, but that the whole can only be understood from an understanding of the parts. It seems that neither process can then get started. One example of this relationship is where the parts are the words of a sentence and the whole is the sentence itself. Certainly if you do not understand an important word in a sentence you will not understand the sentence. Conversely, if you did not understand the whole sentence, as in the Hamlet example, then you would not have understood the word “unfold” correctly. The hermeneutic circle seems to present a problem. On the other hand, most of the time we just read and there is no problem. Words are understood and the sentence falls into place. Is the hermeneutic circle just involved in complicated cases, a lyric poem or a difficult passage in Hegel’s Phenomenology? As we shall see, Schleiermacher will argue that we can break the circle by first obtaining a general impression of the whole in a preliminary reading, and then by moving back and forth from part to whole and back to the part until everything fits together. Heidegger says that the circle cannot be avoided, but must be entered in the correct manner." (Schmidt 2006: 4) Schmidt, Lawrence K. 2006. Understanding hermeneutics. Acumen: Durham.
"Hermeneutics, as we have seen, tends to concentrate on works of the past: the theoretical questions it asks arise mainly from this perspective. This is hardly surprising, given its scriptural beginnings, but it is also significant: it suggests that criticism's main role is to make sense of the classics. It would be difficult to imagine Gadamer grappling with Norman Mailer. Along with this traditionalist emphasis goes another: the assumption that works of literature form an 'organic' unity. The hermeneutical method seeks to fit each element of a text into a complete whole, in a process commonly known as the 'hermeneutical circle': individual features are intelligible in terms of the entire context, and the entire context becomes intelligible through the individual features. Hermeneutics does not generally consider the possibility that literary works may be diffuse, incomplete and internally contradictory, though there are many reasons to assume that they are. It is worth noting that E. D. Hirsch, for all his antipathy to Romantic organicist concepts, also shares the prejudice that literary texts are integrated wholes, and logically so: the unity of the work resides in the author's all-pervasive intention. There is in fact no reason why the author should not have had several mutually contradictory intentions, or why his intention may not have been somehow self-contradictory, but Hirsch does not consider these possibilities. The most recent development of hermeneutics in Germany is known as 'reception aesthetics' or 'reception theory', and unlike Gadamer it does not concentrate exclusively on works of the past. Reception theory examines the reader's role in literature, and as such is a fairly novel development. Indeed one might very roughly periodize the history of modern literary theory in three stages: a preoccupation with the author (Romanticism and the nineteenth century); an exclusive concern with the text (New Criticism); and a marked shift of attention to the reader over recent years. The reader has always been the most underprivileged of this trio strangely, since without him or her there would be no literary texts at all. Literary texts do not exist on bookshelves: they are processes of signification materialized only in the practice of reading. For literature to happen, the reader is quite as vital as the author."
Eagleton, Terry 19962 [1983] Literary Theory: an introduction. Blackwell: Oxford pp. 64-5.