As noted in my previous post, in First Person narration, the angle of vision is “single-track”. The central character is also the story-teller who addresses the reader directly, uses first person pronouns for self-reference, and recounts events in his/her own words.
In Third Person limited narration, the angle of vision is similarly “single-track”. There is only one focal character, and our access to plot developments in channeled through his/her personal perceptions, experiences, and discoveries. But there the similarity ends. In Third Person Limited narration, the focal character is being viewed through a telescope wielded by the author. And this makes a Critical Difference.
In Third Person Ltd. Narration, the character is oblivious to the fact that he/she is under observation. Meanwhile, the author plays the role of an on-the-scenes reporter operating under cover. Like a Nato observer, he/she uses third person pronouns when reporting narrative developments to the reader – ostensibly without bias.