The middle gender for the word "быть" chosen because the sentence is about five people, not one person. If we were talking about one person, we would have to write "был". -> "Там был один человек." With the word "человек" there is another rule. Yes, "человек" is a singular noun. Its plural is "люди". But in Russian, the word "человек" is always used with numerals. For example, "один человек", "345925 человек", "пять человек" and so on. The word "люди" is used without numerals when referring to a group of people. For example, "На работу люди ездят на метро". "Множество людей ездят на метро", "Толпы людей ездят на метро" Also, the word people is used with words that only look like numerals. For example, "Сотни людей", "Тысячи людей", "Миллионы людей". The words "Сотни", "Тысячи", "Миллионы" are not numerals because they do not indicate a specific number, but only an approximate number.

Manek, two options here: 1. там было пять человек. Там было много людей. Там было много народу. Там было много людей, которых я знаю. У нас мало людей. 2. там были пять человек (plural!!!!). Там были многие люди. Там были многие из нас. Там были многие, кого я знаю. Многие люди были там. Многие из нас там были. Многие, кого я знаю там бывали. Немногие бывали на Луне. Take it this way: - "5" is the grammatical subject. Or even "it was 5 there" with "it" subject. - "people" is grammatical subject. And you can use both. You use the former when you're informing me about the number. "I counted 5" or "concentration of people was high enough". You're speaking AMOUNTS. With things habitually counted (like people) you often use the former colloquially just out of habit, when both are possible. Can sound a bit dehumanizing:) You use the latter when these people matter (for you, the speaker), not just their number. When you're describing a room you say "там были две картины". You're not "counting" paintings. When you are counting paintings as in "there were 5 of them there, but since then one was sold" it still can be both: там было пять (картин), но с тех пор одну продали. ("number of paintings in museum" on your mind) там были пять картин, но с тех пор одну продали. ("current location of specific paintings" or "what I saw there during my visit" on your mind) But with people it is different: you don't expect rooms to have paintings, and even in museums you don't count them. We count people habitually. За чертой бедности жило 7 миллионов - statistical department talk. .... жили в ужасных условиях - "terrible conditions" is what THEY experience. So you switch to people as subject.

бЫло пять челове́к is plural, бЫл один человéк is singular