As you know, it is the English third person singular neuter pronoun. It replaces all singular neuter nouns. This allows the language to reduce the amount of repetition required to communicate. Look at that question this way:
Whose party is this party?
Whose party is it?
There is another aspect to the use of it as well. English, unlike many other languages, doesn't like "subjectless" verbs.* You can't make statements such as:
Is important to attend the meeting
So it acts as an expletive or "filler" subject:
It is important to attend the meeting
* Though it's not unusual to encounter "shorthand" English now and then. Here's an example of that from a hypothetical diary entry:
Went to the school. Saw Tom. Had lunch with him at Kelsey's.
Reading this entry, any English speaker would immediately understand that the implied subject is the writer.