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Java represents a compromise between fully compiled (like C/C++) and fully interpreted (like Smalltalk or Perl) models.
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Java "compiler" produces a binary bytecode output which is portable and much smaller than the real binary for a specific machine (Typical bytecode size is of order of the original source code, within a factor of 2).
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Java "interpreter" executes this bytecode and is therefore less dynamic than e.g. Perl interpreter (which performs an equivalent bytecode construction internally and on-the-fly when reading the program source).
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In general, the compilation process is: a) time consuming and b) platform specific. Hence, interpreters are built and used to facilitate a) rapid prototyping and/or b) portability. Java model is focused on platform independence but the development throughput is also reasonable since the Java compiler is fast and generates compact bytecode output.
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