The perspective through which events in a narrative are perceived and filtered, determining what information is available to the reader. It's the lens through which the story is focused, distinct from who tells the story.
From Latin 'focus' (hearth, center) plus '-ization.' Coined by French narratologist Gérard Genette in the 1970s to distinguish between who sees (focalization) and who speaks (narration) in storytelling, refining earlier concepts of point of view.
Hitchcock was a master of focalization - in 'Rear Window,' we're trapped with Jimmy Stewart's limited perspective, seeing only what he can see from his apartment window! This creates suspense because our knowledge is restricted to one character's viewpoint, making us complicit in his voyeurism.
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