|Pronouns are words we use in place of people's names. Every language I know of has them. Some languages use the same word for the concepts we refer to as "he", "she" and "it". (These are "third person pronouns"; being selfish, the first person is always "I" and the second person is "you".) English has many words, and part of the tension we feel to determine the sex of a person is to know what to call them.
For a long time, male/masculine words were the default. We said "mankind" when referring to our entire species. Using "he" to mean "a person" is somewhat sexist. If we used "she" to stand for everyone, men would eventually become annoyed as well. In our langauge, "it" never refers to a person, and so using "it" to avoid gendering someone is rude and dehumanizing.
It is difficult to talk about a person at all, however, without using pronouns eventually. Otherwise, one must continue to use the name, or construct sentances in cumbersome ways.
Sometimes, it is adventageous not to gender the person even to "he or she". Some people do not feel like a "he" or a "she". And they are trampled again and again. As long as "he" and "she" are the only options, people will still want to know whih one you are, whether or not you want them to know. To offer a safe option that can refer to all individuals would add flexibility to our language, and in some ways dull the need to gender (or, properly, sex) every person we see. Before we can explore our neutral options, we need to understand grammar.
We use 5 words, sometimes with overlap, to substitute for names.