Watson, the narrator, is definitely a main character in these stories. So why don't we call him a "Central Narrator"? Because Watson is telling his own story, sure, but only insofar as that story relates to Mr. Sherlock Holmes. We never hear more than a paragraph or two of Watson's experiences when Holmes isn't around. Holmes is clearly the focus of Watson's storytelling, so Watson is a "Peripheral Narrator," then: he interprets the life of a close friend for us, the readers. This makes Watson a biased narrator (how many times does he remind us of his simple faith in Holmes's abilities?) but probably not as biased as Holmes would be about himself.