A story about what happened in the future (note the past tense). According to the Oxford English Dictionary, "A sketch, outline, or description of an imagined situation or sequence of events; esp. a) a synopsis of the development of a hypothetical future world war, and hence an outline of any possible sequence of future events; b) an outline of an intended course of action; (to make a scenario of a story, book, or idea; to sketch out; also scenarioize, scenarize.) The over-use of this word in various loose senses has attracted frequent hostile comment." For example, scenario is used as a substitute for the word alternative in spreadsheet talk. Scenarios can distort one's perception of the likelihood of future events, and for that reason, they should not be used to make forecasts. Instead, they can be used to gain acceptance of forecasts. Scenarios can help to get people to think about the unthinkable or to consider what they would do given an unfavorable forecast. It can lead to contingency plans. One of the earliest uses of scenarios relates to the Battle of Dorking:
In 1872, there was a German invasion of Britain. The British armies and fleet, it will be remembered, were at that time scattered across the world – putting down mutiny in India, protecting Canada from the United States, and guarding Ireland against Emperor Napoleon III. As a result, the home defenses were minimal on that morning in March when the German boats set out across the North Sea. What Royal Navy was left in British waters soon succumbed to the German mines and torpedoes – weapons that had been developed in secrecy. British land forces suffered not only from lack of numbers, but also from inadequate training and discipline, combined with an outdated philosophy of warfare. The great stand at the Battle of Dorking failed: The Germans conquered the British.
This story is, of course, false. It was written by G. T. Chesney and was published in Blackwood’s Magazine in 1871. At that time, it was a plausible forecast. The publication of “The Battle of Dorking” created a political sensation. Prime Minister Gladstone attacked both the plausibility of the forecast and the wisdom of publishing such an alarmist view. Debate followed, and changes took place as a result. (The story has been passed along by Encel, Marstrand and Page, 1975, pp. 63-64.) Gregory and Duran (2001) discuss principles for using scenarios in forecasting.