If they are question s of grammar, why are you using the singular it in your examples? What does it refer to? and What do they refer to?
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LiveinjapanWhat does the clause that starts with deciding refer to?Yes, I noticed that post later, and then I had a better idea of what you wanted in this post. refer to is not exactly correct, in my opinion, although it's understandable. Strictly speaking, only nouns and pronouns can refer. I think you want to say:
LiveinjapanNouns or pronouns can refer to somethingYes. In this definition of "refer", the noun or pronoun always refers to its counterpart in the real world.