Isn't that Sie means She or They? Where is the "you" coming from?
sie = she, they
Sie = you (formal)
Check out the 'Tips and notes' section found in 'Basics 1' for a complete chart.
But if the word is at the start of the sentence, the 's' would be capitalised either way.
How are you supposed to tell "Sie essen." apart from "Sie essen."?
Context. Since in this example there is no context, both answers are accepted.
actually, no, my answer was "she is eating" was not accepted
sie isst = she's eating / she eats
sie essen = they are eating / they eat
Sie essen = you are eating / you eat
Why if BOTH are accepted did I get a "wrong" for writing she??
both "sie essen" (they eat) and "Sie essen" (you eat) are accepted.
she eats = sie isst