Third Person (Limited Omniscient)
The narrator of Oliver Twist tends to be pretty hands-off. In general, we only get to see what’s going on in the heads of a very few characters (including Oliver, obviously). Particularly with the members of Fagin’s gang and the descriptions of London, Dickens backs off and is more objective.
The effect is that these scenes seem almost journalistic—it’s like we’re reading a newspaper exposé on criminals in London, instead of a novel. But every now and then, the narrator launches into a lengthy discussion of how the plot is working, or what he’s planning on doing in this particular chapter. Take, for instance, the famous passage from the beginning of Book 1, Chapter Fifteen:
If it did not come strictly within the scope and bearing of my long-considered intentions and plans regarding this prose epic […] to leave the two old gentlemen sitting with the watch between them long after it grew too dark to see it […] I might take occasion to entertain the reader with many wise reflections on the obvious impolicy of ever attempting to do good to our fellow-creatures where there is no hope of earthly reward.[…] But, as Mr. Brownlow was not one of these […]I shall not enter into any such digression in this place: and, if this be not a sufficient reason for this determination, I have a better, and indeed, a wholly unanswerable on, already stated; which is, that it forms no part of my original intention to do so. (15.1-2)
These digressions, or breaks in the story, remind the reader that this is in fact a novel, and not real life (as if you needed reminding). They serve to add to the distance between us, the readers, and the characters and action of the story. The distance between reader and the characters in the novel was important to Dickens from an ethical, as much as from an artistic, point of view.
Many of his contemporary critics and reading public feared that novels could be too realistic, and that naïve readers (often female readers) wouldn’t be able to tell the difference between fiction and reality. Especially for a novel like Oliver Twist, which is about "dangerous" subjects like poverty, crime, and the relationship between the two, Dickens probably felt that it was prudent to put the occasional check on the reader’s sympathetic identification with the characters.