Time Sharing System:

With the use multiprogramming, the batch processing can be quite  efficient. However, for many jobs, it is desirable to provide a mode in which the user interacts directly with the computer. Indeed for some jobs, such as transaction processing, an interactive mode is essential.  

Today, the requirement for an interactive computing facility can be, and often is, met by the use of a dedicated microcomputer. That option was not available in the 1960s when most computers were big and costly. Instead time sharing was developed. Just as multiprogramming allows the processor to handle multiple batch jobs at a time, multiprogramming can be used to handle multiple interactive jobs. In this latter case, the technique is referred to as time sharing, because the processor's time is shared among multiple users. In time sharing system, multiple users simultaneously access the system through terminals, with the operating system interleaving the execution of each user program in a short burst or quantum of computation.