"Literary theory in a strict sense is the systematic study of the nature of literature and of the methods for analyzing literature."
I'm pasting the whole paragraph. The whole of it is important ;)
Literary theory in a strict sense is the systematic study of the nature of literature and of the methods for analyzing literature. However, literary scholarship since the 19th century often includes—in addition to, or even instead of literary theory in the strict sense—considerations of intellectual history, moral philosophy, social prophecy, and other interdisciplinary themes which are of relevance to the way humans interpret meaning. In humanities in modern academia, the latter style of scholarship is an outgrowth of critical theory and is often called simply "theory." As a consequence, the word "theory" has become an umbrella term for a variety of scholarly approaches to reading texts. Many of these approaches are informed by various strands of Continental philosophy and sociology.
Wikipedia rules!!!!! - it allows you to copy paste with CC license.