Since the very beginning of human civilization, Story Telling has been an integral part of it. And by Story Telling, I mean here Narration or in a broader sense Literature. Be it Ancient Sloka's of Vedas, Keats Poetry, Shakespeare's Plays, or be it the epics, legends, myths, ballads, folktales or today's fiction/non fictions or even journalism, they are all narration on some form or other. Narration or Story Telling is the heart of human society, and here we are going to deal with the types of Narration, from a writer's or a narrator's perspective: first, second and third person narration. Which type of narration is most used and best suits in which type of literature.
I am no critic, and will not give judgments over different forms of narration. Following is a comparative analysis of various forms of narrations.
Narration in first person is, when it is from the view point of 'I' or 'We'. The 'I' here is basically the protagonist, but there is no hard and fast rule for this, and the first person narrator can be any character of the story. The narration is usually from point of view of that single character, what he sees, what he thinks, what his perceptions are regarding different situations and about all other characters. This approach seems to be constrained, as the narrator's limitations about knowing every person, being present in all the situations and at all the time. But if the narration is an Autobiography or a Detective fiction or any such single person oriented literature, first person narration is the most suitable mode of description. First person narration does not imply that, all other characters' importance can be belittled, rather the author have to be brilliant enough to bring the beauty, the charm of all the characters through the eyes and the mind of the protagonist or the first person narrator.
On the other hand, third person narration has a viewpoint of 'He'/'She' or 'They'. The narrator usually is not a character of the story, and the story is told by the author or someone who is not a part of the story. Scope of third person narrator can be limited or he can be omniscient. The limited scope narration is somewhat similar to first person narration but usually the character in focus changes from time to time or scene to scene. There by having better grip over the storyline. In the omniscient narration approach, the narrator is aware of occurrence of all the events, the thoughts going on each individual character's mind, and judgments formed there by. He is actually not involved in the story, yet has 'above all' supremacy. Narration in third person is the most preferred method in today's literature. It enables the author to bring in more complex plots and widens the horizon of his character's persona.
Narration in second person does exist too, but when compared to the first and third person narrative, the volume of literature written in this mode of narration is miniscule. As suggested by its name it presents the viewpoint of 'you'- the second person pronoun. But then there is a genre of literature that is represented the best in this form of narration. Here they go; the self-help books, role playing games, not to ignore some specific advertisements.
Finally, this is not a question, which form of narration is the best. They all have their own enamor to captivate the readers. The genre of literature is one cardinal factor of course, but then it also depends upon the author; his presentation skills, his expertise in particular mode of narration and how he commutes to the reader's mind. That is what makes all the difference.