Third-Person Point of View: Omniscient or Limited
The third-person point of view is a form of storytelling in which a narrator relates all the action of their work using a third-person pronoun such as "he" or "she."
There are two types of third-person point of view. A third-person point of view can be omniscient, in which the narrator knows all of the thoughts and feelings of all of the characters in the story, or it can be limited. If it's limited, the narrator only relates his or her own thoughts, feelings, and knowledge of various situations and other characters. Very often new writers feel most comfortable with first-person, perhaps because it seems familiar, but writing in the third-person actually affords a writer much more freedom in how they tell the story.
The Advantages of Third-Person Point of View
The third-person omniscient point of view is generally the most objective and trustworthy viewpoint because an all-knowing narrator is telling the story. This narrator has no bias or preferences and also has full knowledge of all the characters and situations—this makes it very easy to pack a lot of information (and knowledge as well as experiences) into one character. Not surprisingly, the majority of novels are written in third-person.
A trick to remembering the difference between omniscient and limited is if you think of yourself (the writer) as a kind of god. As such, you're able to see everyone's thoughts—you are omniscient, or all-knowing.
If on the other hand, you're a mere mortal, then you only know what is going on inside the heart and mind of one person. Therefore, your perspective is limited. Consequently, you need to develop several other characters in order to provide a broad spectrum of situations.
The Golden Rule of Consistency
The most important rule regarding the point of view is to that it must be consistent. As soon as you drift from one point of view to another, the reader will pick up on it. The effect will be that you lose your authority as a storyteller and you'll surely also lose the reader's attention.
Your job as the writer is to make the reader feel comfortable as you take them into your world.
For example, if you're telling the story from a limited third-person narration, and then suddenly the reader is told that the lover of the protagonist secretly does not love him anymore, you will have lost the reader. That's because it's impossible for someone in the story to know a secret without the person telling them. Either that or they overheard them, they read about it, or they heard it from a third party. Either way, without the thread of continuity of one specific person having information, the reader will get confused.
Jane Austen's novel Pride and Prejudice, like many classic novels, is told from the third-person point of view.
Here's a passage from Austen's classic novel:
"When Jane and Elizabeth were alone, the former, who had been cautious in her praise of Mr. Bingley before, expressed to her sister how very much she admired him. 'He is just what a young man ought to be,' said she, 'sensible, good-humored, lively; and I never saw such happy manners! So much ease, with such perfect good breeding!'"
A more contemporary example is J.K. Rowling's Harry Potter series which unfolds its secrets through Harry himself who, like the reader, is new to the world of magic and wizardry.