Direct characterization is when the author clearly states the traits or aspects of the character. For example, "Sarah is a rude and self-centered girl". Indirect is when you discover aspects and traits of the character through their thoughts, speech, personality, and just things in general that are not directly stated. For example, "Sarah called the teacher names when she didn't get picked for the prize". You can infer in this sentence that she is rude.
An acronym, PAIRS, can help you recall the five methods of characterization: physical description, action, inner thoughts, reactions, and speech. Physical description - the character's physical appearance is described. For example, characters might be described as tall, thin, fat, pretty, etc.