That would mean "persons". The matter with "people", "persons" etc. is not that easy when translating between English and Polish. For example, "three people" will be translated very naturally as "trzy osoby", but "osoby" on its own sounds strange and is not a good translation of "people" as a general notion.
If you want, you can read more about it here: https://www.duolingo.com/comment/19428542
EDIT: I checked and actually "osoby" is accepted. I'm not so sure if it should be, but I will leave it. Without specifying even a little, it sounds strange to me.
This isn't a sentence, so how can you tell which version they're asking for? "Ludźmi" was incorrect.