Yes, it means shut your mouth, a door, a window, etc. Lol It is so rude if you tell someone "Shut it!" Maybe even ruder than "Shut your mouth!" because you are being so abrupt that you are replacing "your mouth" with "it". Kind of like you don't have enough time for their crap to even say the full insult. Hahahaha Too funny. :)

It can also mean close the door, window, box, ie, shut/close that which has been left open.