A competency based interview is now the most likely interview technique with large companies and particularly if Human Resources staff are also interviewing . When attending interview you will often be told that it is to be "competency based". Therefore you need to know what this means, what to prepare and what sort of questions to expect.
The key objective of a competency based interview is to find out about your competencies .What this means is that it will be very targeted to examples, rather than generic questions about your thoughts and feelings with regard your career and achievements.
Therefore when planning for a competency based interview, prepare examples from your career that highlight the various skills that you would be required to demonstrate in the position you are interviewing for:
Be ready to give examples of the following typical business situations:

• A situation where you resolved conflict with a colleague or a customer
• A time when you worked to a pressured deadline and delivered
• The performance or project you are most proud of
• A time when something went wrong and what actions you took resolve it
• An example that demonstrates effective leadership skills
• An example of successfully managing up the performance of an underperformer
• An example of working as a team to achieve a common objective
• An example of upward management or motivating or inspiring others, if relevant
• Examples of showing specific skills relevant for the job you're interviewing for

By preparing these before the interview and having notes to hand you will be ready to access examples of all these situations, which you will need at interview. Focus and hone in on your own contribution and ensure that you demonstrate how you added value.
Sample competency based interview questions are below. They basically ask directly for the examples mentioned above.