Who is the narrator, can she or he read minds, and, more importantly, can we trust her or him?
First Person (principally narrated by the Governess)
We have two first person narrators throughout the course of the story. Our first narrator (who may or may not be Henry James himself, but either way, is certainly a stand-in for the figure of the author) is present only very briefly; he brings us up to speed on the origin of the story and its background info. He's notable because of his interest in the crafting of the story – through his eyes, we see the tale as a potential best seller, not necessarily as a simple story told by the fire on a winter's night.
The second narrator, who takes over in Chapter One, is of more real interest to us. She tells the story purely from her point of view – so, notably, we never really get an objective look at what's going on. Unlike some first person narrators, the Governess is totally, totally biased by her own thoughts and feelings, and only shows us what she's thinking and feeling…which also makes us pretty suspicious of her at times.