The way in which, in grammar, we show the difference between the person speaking, the person spoken to and the people or things spoken about.
English distinguishes three persons – first person, second person and third person.
The first person represents the speaker and possibly other people associated with the speaker. The first person pronouns are I/me (singular) and we/us (plural).
The second person represents the hearer(s) and possibly other people associated with the hearer(s). The second person pronoun is you.
The third person represents everybody and everything else. The third person pronouns are he/him, she/her, they/them and it.
The pronouns I/me, we/us, you, he/him, she/her, they/them and it are called personal pronouns because they stand for the three persons – the person(s) speaking, the person(s) spoken to and the person(s) spoken of.