David opens this psalm by pronouncing a double blessing on those who have made peace with God regarding their sins. This psalm was almost certainly written after his great repentance regarding the Bathsheba affair as recorded in Psalm 51. One gets the sense that David wrote that psalm while in the throes of spiritual anguish; this psalm is more of a reflection after the fact.
The words expressed above are clearly an outburst of gratitude. After a long backslidden period of sin he is once again right with God. The Hebrew is actually more expressive than the King James translation renders it; his words were more like this: “Oh the blessedness…!”
The primary cause for this joy is that he has just emerged from a miserable period of spiritual darkness. He could have summed up his feelings in one simple statement (i.e., “What a blessing to be forgiven of sin!”), but instead he used three different aspects of this disease of the soul to convey to the reader why it is such a blessing to receive a divine pardon.
The idea behind the word “transgression” (Heb. pesha`) is very closely tied to relationship. In this case, his sinful actions had brought about a rift between him and the Lord. And the longer he languished in his rebellious behavior, the further he drifted from God. By the time Nathan confronted him, David had seemingly brought himself right to the point of downright apostasy.
The word “sin” (Heb. chătâ'âh) means to miss the mark, to fall short of the type of behavior delineated in the Law. The Bible clearly outlines how people are supposed to interact with God and how they are to interact with each other. Sin occurs when a person fails—in these interpersonal relationships—to live up to that standard.
The third term David uses is “iniquity” (Heb. 'âvôn), which literally means to twist or distort something. Sinful actions may be forgotten by the person, but they leave a long lasting effect upon his heart. Sin contaminates every aspect of a person’s inner life. His heart, emotions, will, thinking and even memory become corrupted by those spiritual crimes.
After having spent time considering the things he had done, the effects of his actions upon the Lord and others—and perhaps uppermost in his mind—the effects his sin had had on himself, in essence, David is bursting forth in praise saying, “Oh the blessedness of the man whose rebellious acts have been carried off and disposed of; whose selfish, abominable actions have been hidden from view; whose inward corruption has been cleansed!”
Having emerged from the long, dark tunnel of separation from God, David can clearly see the spiritual blessings which had been lavished upon him.