Third person: an overview
As I've said before, the terms "viewpoint" and "point of view" can mean two different things: either the viewpoint character or the type of viewpoint (first, second, or third-person). I'm using it in the second sense today.
Third person viewpoint, taken as a whole, is probably the most commonly used viewpoint in fiction. There are seemingly an infinite number of ways to do it, because third-person viewpoint has a very broad range, from what I call "tight third person," where the writer not only sticks with a single character's point of view, but also provides his/her thoughts and emotions (and only that one viewpoint character's thoughts and emotions), to the broad sweep of omniscient viewpoint that can dip into anyone's thoughts at any time or tell the reader things that are going on elsewhere, that happened in the past, or that will happen in the future.
The worst part of it is, neither the terminology nor the ways of dividing up the third person viewpoint are standardized. Some references will tell you that there is only ever the omniscient narrator (but sometimes the narrator chooses to focus on only one character); others will split things up into dozens of fine distinctions, depending on whether the narrative voice matches the character's voice, how much of the character's thoughts are or aren't shown, whether the narrator is explicit, and a bunch of other things.
I personally find most of those fine distinctions to be pretty useless from a writer's perspective. Maybe they're helpful if you're analyzing stuff after it's written, but I've never found them to be much help while I'm writing. So I break the third person viewpoint up into three general sub-categories, and lump the rest of the distinctions under "voice," where I don't have to worry about them so much.
My three categories are: 1) Tight third person (also known as intimate third-person, third-person-personal, limited third person, third person subjective, and probably a bunch of other stuff). This is the viewpoint where the writer sticks with a single viewpoint character, providing his/her thoughts and emotions directly. The only way for the reader to find out the other characters' emotions is for the viewpoint character to guess or infer them from what those characters say and do.
2) Camera-eye third person (also known as third-person objective, observer-in-the-corner, third-person-impersonal, fly-on-the-wall, third person indirect, camera-on-the-shoulder, and, probably, also a bunch of other things). In camera-eye third person, the narrator does not give the reader anyone's thoughts or emotions. The writer just describes expressions and actions, provides dialog and tone of voice - the stuff that a camera or observer could see, and nothing more. Sometimes the writer's "camera" sits on one particular viewpoint character's shoulder; sometimes it's further away, or changes focus; but it always shows only what is happening from the outside.
3) Omniscient viewpoint, in which the narrator is an invisible character who knows everything that has ever happened or will ever happen and everything that anyone is thinking or feeling, and who can report as much or as little of this as seems appropriate. I've heard the term "limited omniscient" bandied around a couple of times, but it seems to mean contradictory things depending on who's using it, so I'm waiting until a consensus definition appears before I worry about using it.
Unfortunately for precise terminology, these categories do not have neat gaps in between - there's a fuzzy area between each pair, where stories seem to be too objective to be called "tight third," but are still providing the viewpoint character's thoughts, so they can't quite be "camera eye," or where the narrator sticks with the same two characters' thoughts, so it doesn't really look like a truly omniscient viewpoint but it's still not a single, tight-third viewpoint character. This is of great interest to a lot of folks who like to analyze and categorize writing, but I don't think it matters nearly as much to writers.
What really matters to writers is that whatever the writer comes up with works. Usually, this means that there's a certain amount of internal consistency - one doesn't start off in tight-third and then switch to camera eye or omniscient halfway through (unless there's a major section break to clue the reader in that the writer is doing this on purpose).
As I said, third-person viewpoint, taken as a whole, is probably the most popular viewpoint among writers of fiction. I think this is because of its flexibility - in tight-third, the writer can get almost as up-close-and-personal with the viewpoint character as one can get in a first-person manuscript, or the writer can provide an illusion of objectivity by backing away into camera-eye, or even omniscient. The writer can manipulate the focus and scope of a story by choosing which end of the scale she tells it from, making a sweeping epic feel more intimate and personal by sticking with a tight-third-person viewpoint and a single-narrator structure, or opening up what would otherwise be a restricted, personal tale by using omniscient viewpoint to bring in broader social and political consequences that the obvious tight-third viewpoint character wouldn't know about.
And one can even have it both ways (both intimate/personal and with broader scope) by using a multiple-viewpoint-character structure while telling each characters' scenes in tight-third. (One can, of course, do the same thing with multiple first-person viewpoint characters, but it's a lot more difficult to pull it off because it's a lot easier for the reader to confuse three different "I" characters than three tight-third viewpoint characters, each of whom has a different name.)
Of my three categories of third-person viewpoint, omniscient was historically the most popular, up into the early 20th century. Somewhere since then, tight-third has become the predominant type of third-person viewpoint. I found tight-third hellishly difficult to learn to do, but once I learned how, it became my favorite. I'll talk more about that next time.