difference - it VS. this Vs. that

Iv'e never understood what is the difference between the subject pronoun "it" and the demonstratives "this" and "that".

To be precise, I understand well the difference between those two demonstratives ("this" and "that"). "this" is used for when being close physically or when pointing on the object, and "that" is used for when the object is far or no pointing it. But I don't understand the difference between these two ("this" and "that") and the pronoun "it".

---

N.B. The same question I can ask about the pronoun "they" and the demonstratives "these" and "those", but in this case "they" is used both for human beings and all the rest, unlike the pronoun "it" which is used for everything except about human being.

Answer

The difference between the two based on the "Cambridge dictionary" article, is as follow (quote):

"We use "it", "this" and "that" to introduce further information about a topic already mentioned. However, the words have different uses.

We use "it" to continue to refer to the topic we are already writing or speaking about:

The heart is the central organ in our bodies. It is used to pump oxygen around the body through the bloodstream. (It refers back to The heart)

Warning: We don’t use "it" when we first give information about a topic, for example immediately after a chapter or section title in a text:

(b) Green application form

*This* must be signed by all applicants and returned by 30 November 2009.

Not: *It* must be signed …

We can use "this" to refer back to whole clauses and sentences and to previous parts of a text. "This" highlights the information referred to much more strongly than it. Writers often use "this" when a point or idea is to become an important part of the discussion that follows:

More and more people are discovering that Tai Chi is one of the most valuable forms of exercise. This has led to a big demand for classes. (This refers back to a whole sentence.)

Heavy rains and stormy conditions throughout the summer have led to severe shortages in strawberries and other soft fruits. This has led to price rises in many supermarkets and shops.

We use "that" in a similar way to this. However, when we use "that", we distance ourselves more from the topic or from aspects of the topic:

For many traditional football supporters, it is a problem that so many young girls and women attend football matches these days. That is a sexist attitude of course.

"That" is also used to refer to ideas associated with another person:

The chairman apologised for the poor performance of the company and promised a better future for investors. That was a promise many people felt he could not possibly keep."

(All of the above is from the Cambridge dictionary. I've just added some graphics such bold letters etc. in order to make it easy for reading and understanding.)

The above Cambridge article deals with the using of "it", "this" and "that", while writing or talking generally. But the original question is also about a case of pointing on an animal or a fruit for example and talking about it. So in that case should we say "*It is a nice animal" or "This is a nice animal"?

It seems that it depends on context. If we are around with the ability to point on the object, meaning that we see it, then we can use "this" or "that" depends on the distance. But if we don't see it at all, we use "it".