A distinctive use of the word "it", mentioned above, is in sentences such as:
It is raining.
It is cold outside.
In these sentences, "it" does not have the usual role of a pronoun: referring to a previously-mentioned thing. Rather, in these cases "it" is being used as what grammarians call prop it.
This usage arises because in English a sentence must have a subject. (There are exceptions, principally imperatives and when the subject has been ellipted.) In order to fit in with the standard sentence structure, the pronoun "it" is added to the start of the sentence. This perhaps illustrates the principle that the human brain naturally forms sentences according to predefined patterns or rules that are held very deeply; as has been suggested by Noam Chomsky and others. This also means that it is nonsensical to ask what "it" refers to in "it is raining"; the word "it" is not being used to refer to anything.
Reference: Edmund Weiner (ed.). The Oxford Reference Grammar. Oxford. 2000.