The past continuous describes actions or events in a time before now, which began in the past and were still going on when another event occurred.
It is used:
Often, to describe the background in a story written in the past tense, e.g. “The sun was shining and the birds were singing as the elephant came out of the jungle. The other animals were relaxing in the shade of the trees, but the elephant moved very quickly. She was looking for her baby, and she didn’t notice the hunter who was watching her through his binoculars. When the shot rang out, she was running towards the river…”
a) to describe an unfinished action that was interrupted by another event or action, I was having a beautiful dream when the alarm clock rang.
b) to express a change of mind: I was going to spend the day at the beach but I’ve decided to get my homework done instead.
c) with wonder, to make a very polite request: I was wondering if you could baby-sit for me tonight.
Examples
They were waiting for the bus when the accident happened.
Caroline was skiing when she broke her leg.
When we arrived he was having a bath.
When the fire started I was watching television.
Note: with verbs not normally used in the continuous form, the simple past is used.