Believe it or not, I'm so not a fan of this catchall term for what I, and other scholars interested in establishing the historical context of the text and its reader, do. I do actually incorporate other theoretical stances in some of my analyses. Basically, I just think that we should all do a lot of archival research. According to me, "New Historicism" is just a methodology, not a theory.
"Cultural poetics" is my shiny term for what I feel New Historicism actually is: it's one part figuring out who we are and one part constructing who we are.
The terms refer to texts that are not traditionally considered literary or artistic; I'm talking about things like legal documents, pamphlets, grocery lists, newspapers, and letters. I say use 'em—use 'em all!
We need to get a clear picture of history, and to do that, we need to extend the pool of evidence far beyond the scope of the text. I get a lot of grief over this sometimes; people who aren't that into what I do think that I value these texts over literary ones.
Well, you know what? Maybe I do. Maybe I care more about what the people of the past as a whole had to say and less about deciding which texts are the "privileged" texts. Do I really think that King Lear and a grocery list carry the same literary, social, and artistic heft? No. Do I think that looking at one can help me understand the other? Heck yes.
You know those times when you don't know what a word means, and for some reason you don't have access to a dictionary or to the Internet but still have to figure it out? In that situation, you have to use context clues to figure out what's going on.
Contextualism is kind of like that—except with New Historicism, we're trying to establish the context by rebuilding history and then fitting the literary text—whether a play, poem, or prose piece—back into that context, in order to see what influences what and how it all meshes together.
I know this sounds like the start of a bad research paper, but since the beginning of time, humans have been in various power struggles with each other, and that means that power is a super important thing to think about it you're trying to establish historical context. I'm indebted to Foucault for his theoretical work on the history of the institutions (governmental and otherwise) that manage and maintain power over our lives.
How does this fit with what I do? Easy peasy: literally everything I say in my analysis of history—and in my analysis of that analysis of history—includes an account of the various power structures presented in a given text. These are the power structures at play behind the scenes in real life and in the text, so if you're into history, you just can't ignore them.
First off, this is not what I do; this is what Raymond Williams does. It's good, important work, and it also came about around the same time as New Historicism did. (It also got a lot of attention, but whatevs; I'm still a bigger deal. I think.)
Anyway, the main difference people see between New Historicism and Cultural Materialism is that New Historicism is all about looking at top-down power structures (for example, powerful institutions like the Church, the monarchy, or the military), while Cultural Materialism is all about looking from the bottom up (for example, Cultural Materialists are all about studying the working class).