Referring to a single person who may be of any gender in English can be tricky. It can be awkward to use words like "one" or phrases like "he or she," and many a grammarian hates using "they" as to refer to a single person. How has English gotten this far without such a convenient pronoun? Actually, it hasn't.
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Certainly, it's polite to refer to a real human being by whatever set of pronouns they feel best describes them, whether those pronouns are common in English or not. But when referring to a hypothetical person who may be of any gender, English can be a bit clunky. For centuries, students of English grammar have been encouraged to write "he," "him," and "his," when referring to a person who could be either male or female (the idea that a person might not fall into either category likely didn't occur to 18th-century prescriptivists).
More recently, efforts to make the language less sexist have placed an emphasis on "one" as a generic personal pronoun (as in "If one wants to do well on the test, one should study hard.") and "he or she" (as in "Each student should place his or her name at the top of his or her paper."). While we do see these pronoun usages in text, they come off as quite formal and awkward for everyday speech. (Plus, "he or she" suggests that that your hypothetical person is a "he" or a "she.") "It" still pretty firmly refers to inanimate objects and, sometimes, non-human animals. In most cases, English-speakers consider referring to a human as "it" as, well, dehumanising.
"They," on the other hand, is a pronoun on the rise. While many folks hate seeing "they" used as a singular pronoun, some grammarians are starting to recommend it as a generic singular pronoun. After all, English speakers already commonly use "they," "their," and "theirs" to refer to a single person and it causes little confusion. It makes sense; centuries ago, "they" was a well-accepted singular personal pronoun.
A Brief History of "They"
The truth is, English isn't completely bereft of generic singular personal pronouns. The American Heritage's A Practical and Authoritative Guide to Contemporary English (via Nonbinary.org) notes that "a" exists in some British dialects as a "common-gender pronoun," and in Grammar and Gender, Dennis Baron points to the 18th-century linguist William H. Marshall, who recorded the use of "ou" to refer to a person of any gender. But the gender-neutral pronoun that came to dominate the English landscape is "they."
Going back as far as the 14th century, "they" was a perfectly acceptable pronoun for referring to a singular individual. Chaucer used it that way. So did Shakespeare. So what happened?
Well, the 18th century happened. Numerous grammarians appear on the scene during this period, trying to wrangle the English language into something pretty and clean and standard. One of those grammarians is Ann Fisher, who likely was the first woman to write a prescriptive English Grammar, titled A New Grammar, in 1745. In his book The Language Wars: A History of Proper English, Henry Hitchings credits Fisher with promoting the idea that "he" should function as a generic pronoun, one that might refer to someone who could be male or female. Fisher wrote:
The Masculine Person answers to the general Name, which comprehends both Male and Female; as, Any Person who knows what he says.
According to Hitchings, grammarian John Kirkby followed Fisher's pronoun lead, and things snowballed from there. In 1850, an Act of Parliament declared that, in the language of other Acts of Parliament, the pronoun "he" would be understood to cover male and female people. Of course, while grammar texts may have frowned upon "they" as a singular pronoun, it hardly disappeared from the language or even from great literature. Crack open Jane Austen, and you'll find plenty of singular "they"s.
But when later grammarians aimed to make language less sexist, they were working off of the prescription that "he" could refer to any hypothetical person, male or female. And while prescriptive grammar has tried to include female pronouns for hypothetical people, it has lagged behind on gender neutrality.
The Future of Pronouns?
Even with "they" gaining more acceptance (or rather, re-accpetance) as a singular epicene pronoun, there's the sense that something is missing in the English language, a set of pronouns specifically designed to follow the pattern of he/him/his she/her/hers while not referring to either gender. This isn't a particularly new idea. Baron has found proposals for artificially created gender-common pronouns going back to the mid 19th century. (You can see a few of those proposed pronouns here.)
And we're starting to see new pronouns gaining acceptance on a government level. Last year, the Vancouver School Board officially adopted a policy of using xe/xem/xyr for students for whom gender labels are inappropriate. Non-English-speaking countries are also making strides in this department, with Sweden introducing a new, non-gendered pronoun and Germany no longer requiring gender on birth certificates. So while the shifting "they" is part of the story when it comes to singular epicene pronouns, chances are it won't be the whole story.