The story is told from a third-person point-of-view by the fictive "historian" of the old Dutch in America, Diedrich Knickerbocker, but let's look a bit deeper at Irving's technique.
If we imagine the story filmed, with the narrator carrying a movie camera on his shoulder, we see that the adventure starts from afar. We begin with a sweeping view of the Catskill ("Kaatskill") mountains, then zoom in closer on a particular quaint village, and then on a particular man, the happy-go-lucky and hapless Rip van Winkle, as seen first from the point of view of his neighbors and then shown in general going about his typical business. It is not until several pages into the story that we focus in on a particular adventure concerning Rip. It begins here:
In a long ramble ... on a fine autumnal day, Rip had unconsciously scrambled to one of the highest parts of the Kaatskill mountains.
From now on, we will see the world through Rip's eyes, as told by the narrator. Now we are no longer perceiving everything from the outside but are placed inside Rip's head, hearing his thoughts and what he felt. For instance:
...he saw that it would be dark long before he could reach the village, and he heaved a heavy sigh when he thought of encountering the terrors of Dame Van Winkle.
That we perceive the bulk of the story now through Rip's perceptions is important because it relates to the theme: the far-reaching changes American independence and the new government have brought even to remote places.
Rip represents the sleepy old world, the colonies under King George, a place without individual or group initiative and locked in backward ways. When Rip awakes after twenty years, we experience the new country through his eyes and feel more fully the shock of how everything has changed. Irving emphasizes through Rip his underlying message (theme) that achieving independence and taking responsibility for one's destiny are invigorating and life giving.