Position

Position is a relatively simple concept - it refers the fret number that your index finger will naturally fret. For example, in figure 1 below, your index finger would play the 2nd fret. This is 2nd position. So there are as many positions on a guitar as there are frets + open position which is covered below.

fig. 1
--2--3--4--5--

Stetches

Very rarely will you ever be completely confined inside a group of 4 frets. You'll often have to perform stretches such as below:

fig. 2
--2--4--6--

Your index finger will fret the 2nd fret, so it's most accurate to say we're in 2nd position. But the 4th fret you will need to fret with your middle or ring finger, and the 6th with your pinky. I find it's easiest to stretch the middle finger to reach the 4th fret, which makes it easier to reach the 6th fret with the pinky. Either way you have to stretch. But let's look at a different example:

  fig. 3
e---------------------------------
b-------------------------7-9-10--
g-------------------6-8-9---------
d-------------6-7-9---------------
a-------6-7-9---------------------
e-5-7-9---------------------------

Are we in 5th, 6th, or 7th position? Or are we switching as we change from the 6th to 5th and 3rd to 2nd strings? Trying to specify position strictly can get confusing. I don't like thinking in terms of position. I find most instruction overemphasizes the concept of position for beginners, feeding them examples where there are coincidentally no stretches, and the index finger is on the same fret for all strings. As your infant mind graps to the concept of position, it becomes awkward to play and understand patterns that completely break the concept.

So my recommendation is to take the concept of position lightly. I would call the above example 6th position on the basis that your index finger is mostly fretting the 6th fret. I find no persuasive reason to say anything further on the matter - it's clear to the player that it's not strictly 6th position, given the 6th and 2nd strings. Playing the -7-9-10- on the b string with your middle, ring, and pinky fingers will be difficult and awkward. There is no good reason not to shift positions one fret.

On the other hand, you can play the -5-7-9- on the e string without actually shifting (moving the placement of your thumb on the back of the neck). You just stretch your index finger back.

Open Position

The easiest position for us to start in is open position. This is a bit different from all other positions because here our index finger is actually positioned to fret the first fret. However, because we are using open strings, it is called open position. The C major scale uses all the open strings and never requires playing any 4th fret notes, which means we don't need our pinky to do any work yet, which is good because it is naturally the weakest.

Figure 2 illustrates a full C major scale in open position. Each position contains a little more than 2 octaves of scale notes; however, depending on the position and scale, only one of those scales may have continuous notes from the root note to its octave. Figure 3 contains all the possible C major notes in open position.

fig. 2   
e-------------------------
b--------------------0--1-
g--------------0--2-------
d-----0--2--3-------------
a--3----------------------
e-------------------------
   c  d  e  f  g  a  b  c
  
fig. 3   
e-------------------------------------------0--1--3--
b----------------------------------0--1--3-----------
g----------------------------0--2--------------------
d-------------------0--2--3--------------------------
a----------0--2--3-----------------------------------
e-0--1--3--------------------------------------------
  e  f  g  a  b  c  d  e  f  g  a  b  c  d  e  f  g
 

Figures 4 and 5 below represent the same notes as Figures 2 and 3 above; however, they use a scale map instead of tab. Notice how the scale map uses the horizontal axis for fret numbers while tab uses it to represent time.

fig. 4
|-|-|-|-|-|    
|x|R|-|-|-|    
|x|-|x|-|-|    
|x|-|x|x|-|    
|-|-|-|R|-|    
|-|-|-|-|-|    
 0 1 2 3 4  

fig. 5
|x|x|-|x|-|    
|x|R|-|x|-|    
|x|-|x|-|-|    
|x|-|x|x|-|    
|x|-|x|R|-|    
|x|x|-|x|-|    
 0 1 2 3 4   

Knowing all the notes in the C major scale in open position isn't necessarily going to happen in a single lesson, and you shouldn't dwell on this information trying to take it all in yet. The focus here should be on visualizing the scale and playing it using the references above.

Homework: Play the C scale in open position ascending (fig. 2) and descending (I leave it to you to figure it out). Go slowly. You are going to make mistakes - that's ok. It will be difficult to pick the correct strings. Try playing all 6 strings (fig. 3). Familiarize yourself with reading tab and scale maps.