To expand on the other answers, it depends on the structure of the sentence (as mentioned). For instance, say you have "Sie liest eine Zeitung." (She is reading a newspaper.) versus "Sie lesen eine Zeitung." (They are reading a newspaper). In instances where you're wondering whether it's she or they, look to the other words (typically the verb) in the sentence for clues. I understand how this is challenging for you, because it really confused me at first too. I remember I had begun to think I was getting it all figured out and then suddenly the she/they issue confronted me and I suddenly started losing faith in myself. Just be patient with yourself, practice and things like this (and others) will come with time and eventually be second nature.
'Ei' is a diphthong - you pronounce both letters, like in 'hi', 'rye', 'pie' or 'Zeitung'. The 'e' in 'ie' indicates that this 'i' is a long vowel, but it is not pronounced itself. It sounds like 'see' or 'bee'.
An example: 'sie' (= 'she') is pronounced [ziː] (a bit like the American pronunciation of the letter Z, I think). If you now were to spell it 'sei', it would not only have a different meaning (the imperative of 'sein' = 'to be'), it also would be pronounced [zaɪ̯] (somewhat like the last syllable of 'bonsai').