In Type 3 driver, a three-tier approach is used to accessing databases. The JDBC clients use standard network sockets to communicate with an middleware application server. The socket information is then translated by the middleware application server into the call format required by the DBMS, and forwarded to the database server.
This kind of driver is extremely flexible, since it requires no code installed on the client and a single driver can actually provide access to multiple databases.
You can think of the application server as a JDBC "proxy," meaning that it makes calls for the client application. As a result, you need some knowledge of the application server's configuration in order to effectively use this driver type.
Your application server might use a Type 1, 2, or 4 driver to communicate with the database, understanding the nuances will prove helpful.