As with all cases of hän, he, she, and they should all be acceptable.
"They are dancing" should be "He tanssivat"
Unless they is being used as a singular, non-gendered pronoun, in which case it would be Hän tanssi.
Isnt hän already basically a singular non-gendered pronouns. Anyone who isnt me or you
I typed "she dances" and it worked. How do i differentiate "dances" from "dancing"?