Crafting the setting of a story is one skill, but the point of view of the story provides the reader with an insight into the setting through a character or characters' eyes. Several basic viewpoints exist: first-person, third-person limited and third-person omniscient. First-person perspective uses the word "I" and provides the most intimate look at a single character. Third-person limited is an 'over-the-shoulder' view of a character that only shows what that character knows and experiences and third-person omniscient gives all character viewpoints.
Exposition is any text that provides information about the characters or setting, allowing readers to understand the story. Effective exposition can be difficult; too little exposition leaves readers lost, but too much can drown them in facts and draw attention away from the story, boring them in the process. Exposition features heavily in speculative fiction such as science fiction and fantasy due to the unfamiliar nature of the world that the writer is trying to portray.
One of the most important tasks a fiction writer has is to make characters seem like actual people in the readers' minds, rather than figments of the imagination. Characters can be established through their dialogue, through their actions and through their interactions and relationships with other characters. This establishes the character's personality. During characterization, it's important to think of characters as humans in their own right rather than simply figures in a story and to attempt to make them round. An important distinction exists between flat characters, static characters and round characters; flat characters are extras, only intended to fill a minor role in the story. They do not undergo significant change. A static character can have a major role, but not undergo any major personal change. Round characters, on the other hand, are expected to play a major role and develop throughout the story.
Deciding how the story is put together is another important aspect of narrative writing. One of the most common progressions is exposition, the explanation of the setting; complication, the event that sets the plot in motion; rising action, the events and interactions that build to the final conflict; crisis, which is the critical decision moment; climax, which is the final conflict; and resolution, which is the falling action that resolves all loose plot ends. The three-act-structure is the most basic type of narrative structure. The first act of the story provides the exposition and the end of the first act is usually the crisis or first major conflict. The second act adds more characters, thickens the plot and provides protagonists with a personal conflict. The third act resolves the entire story.