A "gawking character" is a narrator who tells the reader what happens in a scene instead of letting the reader experience it directly. This is called narrator intrusion, and it robs the reader of the full experience, thus distancing him from the story. A gawking character looks like this:
Gawking: Adam saw the orange glow and the rolling black smoke in the sky from where he stood on the corner of the block. As he jogged down the sidewalk toward it, he felt a cool breeze and smelled burning wood. He ducked under the branch of a tree and saw the burning house. From where he stood, he felt the intense heat and heard the flames roar and pop. Adam stepped forward toward the open front door but felt the searing heat from the sidewalk that drove him back.
The bold words show you where the narrator steps between the reader and the action and tells the reader what happens. This detracts from the reader’s experience. A scene must allow the reader to experience the action directly in order to grab him. Would you prefer to watch a friend eat a hot fudge sundae and tell you how sweet it tastes, or would you want to eat it yourself?
A gawking character is also redundant. If the scene is told from the character's perspective, we already know that he experiences what we read. We don't need to say the same thing twice. Here is the same sentence without the gawking character:
Direct: Adam glanced up from the corner of Kingwood and Beechurst. The starlit sky glowed orange, and thick smoke rolled across it. He spun on one heel, crunching grit on the sidewalk beneath his shoes, and ran down the street. The cool autumn breeze carried sparks and the smell the burning wood. As Adam brushed the branches of a tree out of his face, the burning house appeared.
A rushing roar filled Adam’s ears, and a wave of heat lifted the hairs on his tan arms. Shading his blue eyes with his right hand, he squinted against the blinding light. Flames engulfed every inch of the house and licked at the cloudless sky. Pops and crackles from inside the house echoed down the empty street. Adam rushed toward the front porch, but the heat seared his face and drove him back.
This time, the narrator does not water down the scene. We see no "Adam felt," "Adam saw," "Adam heard." Instead, the reader is the one standing on the sidewalk, the one who sees the flames, feels their heat, hears their roar. This kind of direct experience captivates the reader and keeps him interested.
A gawking character can also filter internal experiences, such as thoughts or emotions. Again, if the scene is being told from the character's perspective, we can assume that any thoughts belong to that character (unless he or she can read thoughts or sense emotions).
Gawking: Blood soaked through the fabric, and Preston realized he had plunged the blade into Jack’s side.
This scene is told from Preston’s point of view, so he must be the one realizing something. We don’t need to state the obvious.
Direct: A red stain spread across Jack's gut, matting the shirt to his skin. The silver blade glinted from where Preston had plunged it in Jack’s side.
The same holds true for emotions:
Gawking: I felt worried, but a breeze made me feel a little better.
This is told in first person point of view, so the narrator must be the one who felt worried. After all, he cannot feel another character’s emotions. So, stating what the narrator felt is redundant.
Direct: My stomach churned, but the crisp air cooled my feverish skin and the nausea settled for the moment.
If you take out the gawking character, the reader can experience every scene directly. Any less cheats him out of the story and, in the end, loses him.