it (pron.)
Old English hit, neuter nominative and accusative of third person singular pronoun, from Proto-Germanic demonstrative base *khi- (cognates: Old Frisian hit, Dutch het, Gothic hita "it"), from PIE *ko- "this" (see he). Used in place of any neuter noun, hence, as gender faded in Middle English, it took on the meaning "thing or animal spoken about before."
Whether the charmer sinner it or saint it,
If the folly grow romantic, I must paint it.
[Pope, "Moral Essays," 1735]
The h- was lost due to being in an unemphasized position, as in modern speech the h- in "give it to him," "ask her," "is only heard in the careful speech of the partially educated" [Weekley]. It "the sex act" is from 1610s; meaning "sex appeal (especially in a woman)" first attested 1904 in works of Rudyard Kipling, popularized 1927 as title of a book by Elinor Glyn, and by application of It Girl to silent-film star Clara Bow (1905-1965). In children's games, meaning "the one who must tag the others" is attested from 1842.