Who is the narrator, can she or he read minds, and, more importantly, can we trust her or him?
Limited Omniscient
Our story is told by a narrator who sees things pretty much only from the Velveteen Rabbit's point of view. In the literature biz, we call that a limited omniscient narrator.
It's actually really effective because the reader only sees what the Rabbit sees. It works especially well when the Boy gets sick and the Velveteen Rabbit only catches glimpses of what's going on in the room, and makes the whole oh-no-the Rabbit-is-about-to-become-barbeque reveal a whole lot more impactful. The Rabbit doesn't see it coming…and neither do we.