That or who?

I remember when I was about 9, whilst we were supposed to be writing a "composition", which is what we called an essay at primary school, I was quite unsure as to whether to write "that" or "which" and I stood waiting in the queue at Sister's desk for about 20 minutes before I thought "perhaps it doesn't matter - I could have spent those 20 minutes writing more of my composition".

To this day I am never sure either.

Its like 'them' and 'those' ........them is for people and those is for things.

As in "them people over there are a right noisy bunch" .

I agree that who is preferable when we are talking about people and which or that should be used of things or animals.
BUT which and that can be used about people too.

Knowing when to use which in preference to that is more difficult, but this site explains the rule

en.oxforddictionaries.com/usage/that-or-which