This third-person plural pronoun is used when referring to a group of people. They can also be used in reference to people in general where it is not entirely clear who they is referring to as in They say an apple a day keeps the doctor away.
Long before the use of generic he was condemned as sexist, the pronouns they, their, and them were used in educated speech and in all but the most formal writing to refer to indefinite pronouns and to singular nouns of general personal reference, probably because such nouns are often not felt to be exclusively singular: If anyone calls, tell them I'll be back at six. Everyone began looking for their books at once. Such use is not a recent development, nor is it a mark of ignorance. Shakespeare, Swift, Shelley, Scott, and Dickens, as well as many other English and American writers, have used they and its forms to refer to singular antecedents. Already widespread in the language (though still rejected as ungrammatical by some), this use of they, their, and them is increasing in all but the most conservatively edited American English. This increased use is at least partly impelled by the desire to avoid the sexist implications of he as a pronoun of general reference. See also he1.