When Sie is they or you?
I was translating the sentence "Haben Sie die Kostenlose Medizin da." i though it was "Do THEY have the free medicine there" because Haben is the they form even though Sie is capitalized here. It said I was wrong and it was YOU. Now Im confused someone please make sense of this for me.
Haben is the plural form for multiple words. "Wir haben, sie haben, Sie haben" Sie as formal "you" takes the third person plural form, even when it is used as the formal singular. Think of the old formal "Their royal highnesses" which was used as it was impolite to address royalty directly. You saw your clue "even though it was capitalized", but next time you should remember that it must be "you" in that case. http://dictionnaire.reverso.net/allemand-anglais/haben
I wrote the following in a different thread about how to translate "you" to German which I hope will not only explain why the third person plural "sie" ("they") can also be translated as a formal "you" (then capitalised as "Sie"), but in addition show that you are doing something very similar when you use the English pronoun "you" to refer to a single person (historically speaking), even though you probably don't notice it:
Maybe it helps (or at least provides some background) to view it from a slightly different point of view: In German (and many, but not all other languages) there exist three grammatical persons. The first is the speaker of the sentence, the second the one being spoken to, and the third person refers to someone who is neither of those two. Then all of those three singular grammatical persons also have a plural version, where the only difference is that you now refer to a group of people instead of a single person. In German, they have the following form:
Singular: ich, du, er / sie / es
Plural: wir, ihr, sie
Now, most languages also have ways to reflect the social status and relationship between speakers. For example, if you want to address someone politely or express distance and respect, i.e. to address someone "formally", this is realised by using the third person plural in modern German (there have been times where the third person singular or the second person plural have been used instead, too, but those usages are now mostly archaic). Grammatically there is no difference and you need to infer the exact meaning from context. Only in written German the "Sie" is capitalised to help distinguish it from the normal (and informal) third person plural. And since "Sie" is grammatically already plural, it doesn't change when addressing a group of people formally (Thus, "ihr" is not used with a formal connotation).
But mostly the same is also true in English. Here the pronouns referring to the grammatical persons used to be of the following form in Early Modern English:
Singular: I, thou, he / she / it
Plural: we, ye (you), they
The main difference was that (mostly) the second person plural pronoun "ye" (or "you" if used as an object) was used to refer to someone formally instead of the third person plural. Then, of course, "thou" grew out of style over time, to a point where in modern, standard English "you" is basically always used in place of the now archaic "thou" (and the distinction between the formal and informal address has vanished as a consequence, as far as the pronouns are concerned).
So, to comment on your post, I think it could be useful to think of the pronouns as their grammatical function first (and in this sense "ihr" can be regarded as the plural form of "du") and then as their formal respectively informal meaning on top of that. That might sound more complicated at first, but I think it might make things clearer in the end (at least it did for me).
I know for spaniards is easier to assimilate the differences between du, ihr, sie and Sie, because we have different pronouns for both formal and informal "you", so, for us, du means "tú" (informal singular you), ihr means "vosotros" (informal plural you), and Sie means "usted" (formal singular you) as well as "ustedes" (formal plural you). The word sie means "ella" (she) or "ellos/ellas" (male they/female they, in Spanish we differentiate both genders).
Speaking about genders in Spanish, when we talk about a group of people where there are men and women, we use the male gender.
For German's calling someone 'they' is polite. It'd be kinda like calling someone 'one' in English. "Has one set the dinner table?" (picture the Queen saying it). It means the same as, "Have you set the dinner table," but it sounds posh.