"We must understand the difference between interpretation and application, and properly derive applications from correct interpretation. The “interpretation” of a Scripture is what the verse actually means in its context. However, verses often have a much broader “application” than simply their interpretation.
Treatment of others. For example, Colossians 4:1 has a narrow interpretation, but a much broader application.
“Masters, treat your slaves justly and fairly, knowing that you also have a Master in heaven.” Colossians 4:1 (ESV)
The “interpretation” of this verse is very narrow: slave owners should treat their slaves justly and fairly. However, the verse is not meaningless to those people who do not own slaves, it has a broad “application” in the world, which is that people should treat those they are in charge of justly and fairly.
That “application” is fitting for bosses, guards, parents, military commanders, etc. We have already seen the difference between interpretation and application in Colossians 4:1, about slave owners, and there are many other examples in Scripture.
Building Codes. A good example of the difference between interpretation and application can be seen in Deuteronomy.
“When you build a new house, you shall make a parapet for your roof, that you may not bring the guilt of blood upon your house, if anyone should fall from it." Deuteronomy 22:8 (ESV)
The houses in biblical Israel had flat roofs, so God made a law that flat roofs had to have some kind of railing so people would not fall off. The “interpretation,” of this verse is very narrow, and applies only to people who own houses with flat roofs.
But the “application,” the instruction we get from this example, is very broad, that it is not right or godly to build things that are unsafe and can cause injury to others, so we should provide some kind of safety measure.
Bringing joy. Proverbs 10:1 has a narrow interpretation but broad application:
“A wise son brings joy to his father, but a foolish son grief to his mother."
The “interpretation” is narrow, referring only to sons and the joy they bring to fathers or the grief they bring to mothers. However, the “application” is much broader. Wise children bring joy to the whole family, extended family, and many interested parties, while foolish children bring grief to people.
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