Narrative distance is about how close the reader gets to a character's internal experience.
The author John Gardner gave a classic description in his book The Art of Fiction, in which he broke narrative distance into five levels.
Here's an example of each:
Level 1 (Bird's eye)
It was winter of the year 1853. A large man stepped out of a doorway.
Level 2 (Wide)
Henry J. Warburton had never much cared for snowstorms.
Level 3 (Mid)
Henry hated snowstorms.
Level 4 (Close)
God how he hated these damn snowstorms.
Level 5 (Internal)
Snow. Under your collar, down inside your shoes, freezing and plugging up your miserable soul…