"It" is always a pronoun (like he, she, we or you). For example, I could say "That meal was tasty. I liked it." and it would refer to the meal from the previous sentence. 'That' can also be a pronoun (ex. I can't believe I ate that). But "that" is also adjective, adverb, conjunction, etc. You can say 'that book', but not 'it book' if you wanted to specify a specific book. You could say something was "as big as that" and gesture to an object with your hands for emphasis.