Eli5: Why do you use “they” for non-gendered speech instead of “it”?

Question

I’m not a native speaker, but as far as I understood, for singular objects and animals “it” was used. Why use “they” for individual people then?

In: 1400

Answer 1

I’ve generally used “they” because it implies an unspecified person/persons while “it” is more often used for things like inanimate objects or non humans. I suppose grammatically it would be correct to refer to a singular person as an it but I was raised to think that was rude.