Third person is probably the most distance the speaker/singer can have from the action. The speaker/singer is simply the storyteller, guiding the audience through the narrative, but neither are a part of it - they're both looking at a third person.
The pronouns include:
Singular - he, she, it, him, her, his hers
Plural - they, them, their, theirs
Benefits of third person is that often, either gender can perform the song. One caution - don't use third person to avoid a second person/direct address narrative. We've all been in conversations when we've used "he or she" to describe ourselves, in an attempt to avoid being the direct object of scrutiny.
It's an easy trap in songwriting. Be sure to try all points of view in your lyrics, ensuring you use the best for the song.
