it’s all down to patterning
If you look squarely at the distinction between it’s and its, the difference seems very straightforward. The simplest way of thinking about it? If the word in question expands to “it is,” then use the apostrophe: it’s. If not, then don’t: its.
That’s it. No special terminology or concepts required. End of story.
And yet for many, it’s not. They continue to apply the apostrophe even when the possessive pronoun is the one in use: as in, “The delivery company still hasn’t changed it’s tipping policy.” (Yes, spellcheck: that’s an error.)
Why all the confusion?
It’s the convergence of three factors:
The contraction it’s is far more common than the possessive form, and so we see it a lot more often than the possessive form.
Contrarily, with nouns possession is shown with the apostrophe and so adding the apostrophe for this reason (with the right kind of base to tack the mark onto) is something we’ve been trained to do.
The other possessive pronouns (my, your, his, her / our, their) each have a unique form with respect to their corresponding subject forms. Not one of them looks like the corresponding subject pronoun with an s tacked on at the end.
Let’s take a closer look at that third item, as that one’s a bit layered.
These are the personal pronouns in their subject forms:
Compare those subject forms with the corresponding possessive forms:
Apart from that third-person neuter singular (it), each of the possessive versions reads like a new and unique form, as compared with the subject form. That is, each looks like an entirely new, though related, word: I —> my, you —> your, he —> his, she —> her, we —> our, they —> their.
Only one form looks exactly like the personal pronoun in its subject form. . . plus an s. Where have we seen a pattern like this used to signify possession? With nouns. With regular singular nouns, and a few irregular plural forms.
The movement from it to it’s looks for all the world like the movement from Marcia to Marcia’s, company to company’s, restaurant to restaurant’s, children to children’s, and the scores of other similar forms — all of the form noun to noun’s — that we encounter daily.
It’s a pattern we are well familiar with. It’s a pattern we are trained to follow.
What’s more natural, then, than to apply the apostrophe when we see that s tacked onto the core form it — and the syntax, however intuitively, tells us that this is the possessive form of the word?
So, be gentle if you’re pointing out this visual slip-up to someone. (Or better yet, maybe don’t point it out. If you’re not editing, that is.) And if this is one that trips you up, take heart. There’s a perfectly good reason that it does so. You’re just using your language-patterning skills.
How to overcome that hurdle? Practice, practice, practice. The form its will begin to look and feel right, if you give it time.