LiveinjapanNouns or pronouns can refer to something
Yes. In this definition of "refer", the noun or pronoun always refers to its counterpart in the real world.
I am looking at a table here, for example. When I use the word "table", I expect my listener to know that I am referring to that object here before me that I am looking at. The word "table" refers to the real table.
Expanding this idea further, when you have sentences like these:
Mike went home early. Then he went to sleep.
both the word "Mike" and the word "he" refer to the same person in the real world, so we sometimes say that "he" refers to "Mike", when actually "he" refers to Mike (no quotes). "he" does not refer to another word ("Mike"), but to a person in the real world -- Mike -- just as "Mike" refers to Mike. "Mike" and "he" are coreferential; that is, they both refer to the same person in the real world. We use the terms loosely, however, and people often say that "he" refers to "Mike" in those sentences.
CJ