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

“It” just sounds dehumanising for me because the only times I’ve heard someone being called “it” is with people who think the person being called “it” is a lesser being.