Most narratives are written in either the first or the third person.
First person narrative is where the 'voice' telling the story uses the word 'I'. This can have an intimate, believable confessional feel.
Third person narrative is where the author uses 'he', 'she', 'they' or 'it'. A voice refers to actions, events and circumstances dissociated from both the narrator and the reader. The narrator can be either omniscient (all-knowing) or can merely function to report events as they take place.
Writers will often alternate between these modes. It is not uncommon for the narrative to shift from third to first person. This can help us to understand the characters from different perspectives - first a detached and objective view, then more personal and intimate.
It is important to note that third person narrators are not always totally detached. Sometimes they favour the opinions and point of view of one particular character. Although the narrative may be in the third person it gives a special insight into the consciousness of one or more characters.
Second person narratives, where the author tells the story using 'you' are more unusual. In this kind of narrative the reader is addressed directly and is involved as part of the story. There is often a sense of discovery or reveal with this kind of narrative voice.
The narrative point of view is, then, crucial in revealing and telling us about characters - and also in helping the story to be told in an exciting, structured and significant way.