A writer can develop and reveal character in five ways, but only one of these ways is direct characterization.  Direct characterization is a method in which the author tells rather than dramatizes.  For instance, in Washington Irving's "Rip van Winkle," the author as narrator states the readers that Dame von Winkle is a termagant. This description informs readers of what they should think of this character.

On the other hand, the other four methods of characterization, known as indirect characterization,

1. through a physical description of the character
2. through the character's actions
3. through the character's thoughts, feelings, and speeches, and
4. through the comments and ractions of other characters.

allow the readers' imaginations to become engaged with the narrative. For instance, when Rip climbs up to one of the highest parts of the Kaatskill Mountains, the mysteriousness of the "odd-looking personages" is enhanced by the impressions made upon Rip such as "The whole group reminded Rip of the figures in an old Flemish painting..." And, with indirect characterization there is an expansiveness allowed the author who can then develop theme through this technique.  Further, other elements such as humor, irony, and satire can be incorporated into a narrative that includes indirect characterization. For example, the general shout bursting from the bystanders, "A Tory! a Tory! a spy! a Refugee!" are much more humorous than if Irving were to write, "The bystanders mistook Rip for a Tory." 

Clearly, the use of four methods of characterization rather than merely one is advantageous to an author; moreover, indirect characterization allows for much more creativity on the part of the author, an imaginative quality that enhances the development of character into a living being for readers as well as a much more versatile narrative that can easily incorporate other literary elements such as theme within the characterization.