An indulgence is a remission of the temporal penalty (penance) imposed by a priest on a penitent as a work of satisfaction for a mortal sin. Such works of satisfaction include prayers, fasting, almsgiving, retreats, pilgrimages. A penitent who defaults on these prescribed works of satifaction can expect to suffer for them in purgatory after death, as well as for any unrepented sins.
Indulgences were given to Crusaders who did not complete their penance before they were killed in battle. They didn't have to suffer in purgatory for these omissions, but went directly to heaven. In 1343, Pope Clement VI proclained the existence of a "treasury of merit", an infinite reservoir of good works in the church's possession that could be dispensed at the pope's discretion. On the basis of this declared treasury, the church sold "letters of indulgence" which covered the works of satisfaction owed by penitents. In 1476, Pope Sixtus IV extended indulgences to cover purgatory for the laity in general.
Originally indulgences were given for the self-sacrifice of going on Crusade to the Holy Land. By the 16th century they were dispensed regularly for small cash payments as a from of almsgiving. They were presented to the laity as remitting not only their own future punishments, but also those of their dead relatives presumed to be sufering in purgatory.
The Council of Trent (1545-1563) re-affirmed the granting of letters of indulgence, but not their sale.
Good summary, except I doubt that the treasury of merit was merely proclaimed out of the blue in the 14 century.
Thanks.
Indulgences were given long before the Crusades. Even St. Paul talks about indulgences (although he doesn't call them that) in 1 Cor 5 with the sexual deviant, and then later re-admits that man back into the community in 2 Cor. The practice of donning sack cloth until the Holy Thursday is another example of the practice of indulgences. St Cyprian and Tertullian both mention the practice. The Church has been given the power to bind and loosen temporal punishments due to sin and this was recognized very early in the practice of the Church.
Regards