Demonstratives As Pronouns
When demonstrative adjectives are used substantively, they become pronouns.
Bennie ate a dozen of those jelly doughnuts.
“Those” isn't a noun, but obviously it can stand in for one. Of course, you need context to know what “those” are. A pronoun always needs a referent, something it carries (ferī) back (re-) to. In Latin grammar, referents are usually called antecedents (ante, “before”; cedī, “go”).
Latin has no devoted personal pronouns for the third person. That is because Latin uses demonstrative adjectives instead. This means that if Latin has four different demonstrative adjectives, Latin also has four different ways to say “he” — it depends on which “he” you are talking about!
“He went to Ponza to visit Postumus” could be translated
Hic Ponzam iit ut Postumum visitā ret.
Iste Ponzam iit ut Postumum visitā ret.
Ille Ponzam iit ut Postumum visitā ret.
Is Ponzam iit ut Postumum visitā ret.
These sentences could all be translated the same way, but each means something a little different. Here is what the various “he's” are in the example:
“He” refers to this guy near me, the speaker.
“He” refers to that creep that the speaker cannot stand.
“He” refers to that guy over there.
“He” refers to the guy we are talking about at the moment.
If Latin has four words for “he,” then there are also four words for “she” (haec, ista, illa, ea) and “it” (hoc, istud, illud, id). What is more, English has only “they” for a third person plural pronoun, but Latin also shows gender, so eae isn't just “they”; it specifically refers to a female/feminine group that is being discussed.

