Pronouns stand in for nouns. That's why they're called pro - nouns. When we use them properly, our readers understand what single noun the pronoun stands for. Every problem of pronoun reference upsets this clarity so that readers have problems deciding which of two or three earlier nouns a pronoun stands for or have difficulties finding any noun at all.
I. Ambiguous Reference
If a reader does not know which of two or three earlier nouns a pronoun stands for, grammar books call that an ambiguous reference error:
Ethel told Lucy that her pie was wonderful.
You can fix the pie problem by making the sentence a quotation: Ethel said, "Lucy, your pie is wonderful!" You can also fix it by naming the baker: Ethel told Lucy that Lucy's pie was wonderful. That's also the way to fix the office problem: ...so we sent the files back to the main office.
II. Implied Antecedents(An antecedent is the noun the pronoun stands for.)
Sometimes after we write a statement, we want to refer to the whole idea of the statement. Of course, there's nothing wrong with that desire unless we try to use a pronoun to do it:
Although the last race had been run, it was not clear which team had won the meet.
If you tried to draw a line from the underlined pronouns to their single noun antecedents (the nouns they stand for), you wouldn't be able to do it. If the last race were the antecedent of it, the main clause would read: the last race was not clear... That doesn't make sense. If you tried to use lobbied as the antecedent for which, you'd have a pronoun standing in for a verb and that wouldn't make sense: lobbied won them high praise...
Fix such errors by naming the real nouns:
Although the last race had been run, the crowd did not know which team had won the meet.
Another kind of implied reference error occurs when we try to make a possessive noun become an antecedent for a pronoun.
In Mel's new movie, he falls off a waterfall.
III. Vague Reference
It, they, and you are fine pronouns when we use them to stand in for specific nouns. But sometimes we use them to refer to vague, unnamed entities:
In the book it says that sharks must move in order to breathe.
Naming the intended noun is the cure of these problems:
The book says that sharks must move in order to breathe.