"Uesd by itself" here means that the pronoun alone, without any other words, functions as the entire noun phrase.
He was born in 1960.
Here "He" is the grammatical subject, and stands in place of a noun or noun phrase such as "John Smith" or "The man who I met last night". A pronoun can also serve as the grammatical object, or in other grammatical role. But it always takes the place of a noun or a noun phrase.
- Jane packed up the box and gave it to him. (indirect object)
- John married her. (direct object)
Pronouns do not always refer to people or things mentioned in nearby text. Sometimes they are generic, and sometimes they serve as placeholders in set phrases.
- It's late. (Implied "the time is late" or "the hour is late")
- It's raining. ("It" here has no real antecedent or referent, even implied.)
- It is a good idea to be honest. (It refers to the idea.)