what does "it "refer in this sentence?
The heene parents' plan was to creat a situation where it appeared Falcon was in the craft and that his life was in jeopardy in order to gain a lot of publicity," Alderden explained.

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"it" refers to the situation in which Falcon's parents gain a lot of publicity

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what does "it "refer TO in this sentence?

Like Thea said, "it" is referring to the situations appearance.. think of it like this

"The  plan was to create a situation where it - (the situation) - appeared Falcon was in the craft"