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Question: Why is ''History of the Church'' written in first-person, as if Joseph Smith himself wrote it?
Question: Why is History of the Church written in first-person, as if Joseph Smith himself wrote it?
The common nineteenth-century format of writing was chosen by Joseph Smith, who directed his clerks to write a first person
Jessee described the differences between historical writing as practiced by a modern writer, and those practices in place in Joseph Smith's day:
Since none of the manuscript of the history is in Joseph Smith’s handwriting, and apparently not much of the text was actually dictated by him, why did those employed on the work write in first person, as though the Prophet himself were writing? That common nineteenth-century format was chosen by Joseph Smith, who directed his clerks to write a first person, daily narrative based upon diaries kept by himself and his clerks. In addition, since Joseph Smith’s diary did not provide an unbroken narrative of his life, the compilers of the history were to bridge gaps by using other sources (diaries, Church periodicals, minute and record books of Church and civic organizations, letters and documents kept on file, and news of current world happenings), changing indirect discourse to direct as if Joseph Smith had done the writing himself. Not uncommon according to the editorial practices of the day, this method of supplying missing detail had the effect of providing a smooth-flowing, connected narrative of events.
Many examples from other works of the period show that this was the historical standard of the time. Nineteenth-century American methods of historical writing and editing were very different from those of today. In 1837, for example, Jared Sparks—regarded as “the first great compiler of national records”—edited in twelve volumes the Writings of George Washington. When his work was later compared with original manuscripts, it was found that he had rewritten portions of letters, deleted or altered offensive passages, and changed irregularities in style and awkward modes of expression.
In his review of historical editing in the United States, Lyman E. Butterfield has noted that changing text and creating text faithful to the ideas of the writer were not uncommon in early years, and that seldom were original texts left to speak for themselves.  The History of the Church was written in the general literary and historical climate of its time.
New Testament parallels
Dean Jessee noted that this 19th century approach to historiography matches more ancient practices, such as those used by some Biblical authors:
New Testament writers apparently used a similar method in writing the Gospels. One Bible commentary records that Matthew and Luke borrowed from Mark (Interpreter’s Bible, 7:235–36) and omitted or altered what seemed to be critical of the Apostles. For example, Mark records that James and John came to the Savior and asked that he give them whatsoever they desired; whereupon, the Savior heard their plea that each might sit by his side when he came in glory. (Mark 10:35–37.) When Matthew recorded the event, he said that it was the mother of James and John who desired this privilege for her sons (Matt. 20:20–21.) This difference in recording the circumstances, presumably to place the Apostles in a better light, does not destroy the credibility of the Savior’s mission, nor may we believe that there was dishonesty in making the change.
Challenges with direct citation
One of the challenges facing those who compiled the history was that of presenting the Prophet’s sermons and teachings. Since none of Joseph’s clerks had mastered shorthand during his lifetime, reports of what he said were made longhand. Many of these were smooth-flowing, well-connected summaries and were copied into the history almost as recorded. In some instances, however, it was necessary to reconstruct an address from brief notes and disconnected ideas. George A. Smith’s editorial work was careful, and when he was finished, each discourse was read to members of the First Presidency and the Quorum of the Twelve, some of whom had also heard the original address. Their input proved invaluable. These measures no doubt guaranteed the doctrinal accuracy of such reporting of Joseph Smith’s discourses, but the result obviously would not reflect his personality and speaking style as accurately as a verbatim report would have done.
An analysis of the History reveals those portions obtained from material written personally by Joseph Smith. These clearly reflect his loving and warm spirit. For example, the following is an entry from the History stemming from a portion of Joseph Smith’s 1835 diary written by himself:
“September 23. I was at home writing blessings for my most beloved brethren, but was hindered by a multitude of visitors. The Lord has blessed our souls this day, and may God grant to continue His mercies unto my house this night, for Christ’s sake. This day my soul has desired the salvation of Brother Ezra Thayer. Also Brother Noah Packard came to my house and loaned the committee one thousand dollars to assist building the house of the Lord. Oh! may God bless him a hundred fold, even of the things of the earth, for this righteous act. My heart is full of desire today, to be blessed of the God of Abraham with prosperity, until I shall be able to pay all my debts, for it is the delight of my soul to be honest. O Lord, that thou knowest right well. Help me, and I will give to the poor.” 
- L. H. Butterfield and Julian Boyd, Historical Editing in the United States (Worcester, Mass.: American Antiquarian Society, 1963), 19, 24–25.
- History of the Church, 2:281. Volume 2 link