When an author writes a story, he or she needs to decide who is going to tell the story. Sure, the author is writing it, but he or she must decide which type of narrator will tell that story. Here are the common types of narrator:
First Person: Someone in the story is telling the story. This usually the main character. The first person narrator uses the pronouns "I," "me," and "mine" while telling the story. A first person narrator can tell us what is going on in his or her own mind, but can't tell what others are thinking (unless this character has mind-reading powers). The first person narrator can only tell us what he or she has seen or experienced or been told.
Second Person (comparitively rare): The narrator is talking to you. The narrator uses the pronouns "you" and "your."
Third Person Omniscient: The narrator is from outside the story and uses the pronouns "he," "she," "they," etc. when telling about the main character. An omniscient narrator knows everything in the story and in the world of the story. This type of narrator can tell what is going on anywhere in the story and can tell what any character is thinking or feeling.
Third Person Limited: The narrator is from outside the story and uses the pronouns "he," "she," "they," "his," "her," etc. when telling about the main character. This narrator does not know everything in the story. A third person limited narrator knows only what the main character is thinking and feeling.