Why does duncan give the title thane of cawdor to macbeth?

Duncan gave the title of Thane of Cawdor to Macbeth because it serves as a reward for Macbeth’s valor. The old holder of the Thane of Cawdor was given the punishment of death for being a traitor. When Macbeth and Banquo were on their way back from battle, the two meet the witches, who then tells Macbeth hat he will be the new Thane of Cawdor and will also be the new ruler of Scotland. 

third person

explanation:

note the usage of names and pronouns, "james" & "the old man". this alone can confirm it as third person, as first person uses "i" and the like, while second person uses "you" and the like.

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