" Having said that, hybrid sentences such as "We will not let this people have their liberty" are fairly easy to find within Google Books amongst presumably competent native writers, so it seems that there is some uncertainty about this point. In an extended passage, when you need to repeatedly refer to an ethnic group, I think it would become pretty strained to keep using "it", and you would really have to revert to "they". If you can work this in such a way that "a people" does not seem to be the direct grammatical antecedent of "they" then so much the better.
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So do you mean that if I have a choice, "it" would be ideal?
GPYIf you can work this in such a way that "a people" does not seem to be the direct grammatical antecedent of "they" then so much the better.