It's = It is Its means possession. "Its ball" means the ball belonging to it. "Its" is the same as "His" or "Her". examples: "The dog is wagging its tail" "It's wagging its tail" "Lassie is wagging her tail" A lot of native English speakers will write this wrong. So if it looks wrong, it probably is wrong.

"It's" is always the abbreviation of "it is" as in "It's (= it is) a nice day, isn't it?" "Its" is the possessive of "it" as in, "That is Henry's puppy, but I don't know its name." In the second sentence, "its" means "belonging to it". "It's" is a contraction. A contraction is when a new word is formed from two or more separate words. In English, an apostrophe is used to acknowledge the missing letters. "Don't" is a contraction of "do not," and "shouldn't" is a contraction of "should not." "It's" is short for "it is," or less frequently, for "it has", eg "It's been two hours since I've eaten"