In addition to being used for inanimate objects and abstractions, "it" is sometimes used to refer to people.
In English, pronouns such as it and its have been used to refer to babies and pets, although with the passing of the Victorian era this usage has come to be considered too impersonal, with many usage advocates arguing that it demeans a conscious being to the status of a mere thing. This use of 'it' also got bad press when various regimes used it as a rhetorical device to try and dehumanise their enemies: implying that they were little better than animals. Conversely, few people object to the use of the impersonal pronouns for animals other than pets.
Some people propose using 'it' in a wider sense in all the situations where a gender-neutral pronoun might be desired. The advantage of using an existing word is that the language does not have to change as much. The disadvantage is the possibility of causing offence. This usage of it is currently very rare, and most commentators feel that it is unlikely to catch on.
One author who consistently wrote like this was the children's author E. Nesbit, who often wrote of mixed groups of children, and would write, e.g. 'Everyone got its legs kicked or its feet trodden on in the scramble to get out of the carriage'. (Five Children and It, p. 1)
In earlier Middle English the pronoun was hit, with the unaspirated it being an unaccented form. The genitive was his, with the new form its only arising by analogy in later Middle English.
The pronoun it also serves as a place-holder subject in sentences with no identifiable actor, such as "It rained last night."