[mrbukkake]

"it" has two functions in English. the first is what you described. The technical term is an anaphor, basically a "syntactic variable" pronoun that stands in for a previous noun phrase in subject or object position. This inspired anaphoric macros in Common Lisp: https://en.wikipedia.org/wiki/Anaphoric_macro

The other function is as a dummy subject, as in "it rained", "it's cold". English grammar requires a subject (unlike many other languages, where a pronoun in subject position can be ommitted without the sentence becoming ungrammatical). So here "it" doesn't refer to anything, it's (haha) just there to fulfill a syntactic requirement

t. linguist