Over 200 literary terms, Shmooped to perfection.
You'll find third-person narration in stories where a detached person (someone who isn't directly involved in the action) tells you everything that goes down. A third-person narrator can sometimes be omniscient, when they have a bird's-eye-view of all the goings on. Or they can be limited, and stick closely to the perspectives of just one or two characters.
The bonus of having a third-person narrator is that we readers aren't trapped inside one character's head. We might gain access to the thoughts and feelings of other characters, and we might get to see what goes down in two different places at the same time. It's a nice dose of perspective that allows us readers to evaluate what's going on with as little bias as possible.
But there are drawbacks, too. For one thing, it can be tougher to sympathize with characters when an author is using third-person narration (particularly when it's omniscient), because the narration is so detached from what's going on in the hearts and minds of the folks on the ground. Hey, sometimes we want a little bias, okay?