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Pronouns usually refer to other words, called their antecedents because they (should) come before the pronoun. A pronoun's antecedent may be either a noun or another pronoun, but in either case, it must be clear what the antecedent is. Consider this example:

Michelle told Judy that she must take Tom to the school dance.

It is not clear whether the pronoun "she" in this sentence refers to Michelle or Judy. Unless pronouns refer clearly to distinct, close, and single antecedents, the reader will never be sure who's going to the school dance with whom.

Note: A pronoun must agree with its antecedent. The general rule for pronoun agreement is straightforward: A singular antecedent requires a singular pronoun; a plural antecedent needs a plural pronoun. For example, "The girl ate her lunch" versus "The girls ate their lunches."