Initially, the observer was just that - a lookout who was later armed. The pilot was responsible for all aspects of flight including navigation. As aircraft became more complex, the air gunner was added to the crew with the observer assisting the pilot with his navigation (pointing out landmatks etc).
This situation carried on into WW2 with aircraft such as the Hampden carrying an observer and two gunners, one of whom manned the radio. Once again, the pilot was responsible for the safe navigation of the aircraft. The observer also acted as the bomb aimer. Sometimes, a second pilot (usually a new pilot) acted as the observer to gain experience. There are many stories of the pilot being wounded and the observer pilot taking control.
However, with the advent of night bombing, a dedicated crew member was required to plot the aircraft position and later to use the new electronic navigation aids. Given his own plotting table in the heavies, the navigator (as he was now called) was required to move into the nose to act as bomb aimer over the target. This was not practical, so on raids such as Augsburg, Nettleton carried an extra navigator for this role. This crew member eventually became the Bomb Aimer and replaced the nose gunner.
'Twas a little more complicated than this, but time and space limit the answer.