The narrator of Daniel Deronda knows so much about what's going on with the other characters of the novel, not just in terms of their actions but also of their private thoughts, that sometimes it seems like he or she is actually a third person narrator. There are times, in fact, when the narrator gets right into the characters' minds. The first lines of the novel, in which Daniel tries to decide whether or not Gwendolen is beautiful, provide a perfect example of a technique called free indirect discourse, which is a third-person narrative technique that basically gets into a character's head without explicitly telling us "he thought" or "he wondered." But then, just as we're starting to settle into the rhythm of thinking that we're reading a third person narrative, the narrator starts referring to herself or himself as "I." It doesn't happen a lot – so if you don't pay attention you might miss it altogether.
So, who is this mysterious narrator? Well, he or she doesn't give us a whole lot of clues. We get the vibe that he or she is a little bit older and has been around the block a few times, because we read a whole lot of commentary on the young, immature decisions that the characters make, and this commentary often has the tone of, "oh yeah, I remember what that was like when I was young." The other thing that's interesting is the way that the narrator creates a relationship with us, the readers. Sometimes when he or she comments on what's going on, the narrator pulls us in as if we're in cahoots with one another. This technique gives us the impression that the narrator isn't necessarily a person in the society we witness in the novel, but instead exists at the same kind of distance that we do.