Question

True or False: y can be used ONLY to replace names of places

Answer 1

False it could be used to replace anything

Answer 2

When using the pronoun "Y" in French, it's used to replace prepositional phrases that talk about location. When you are saying you're going somewhere, or going to do something, the "Y" in the sentence replaces it. 

Example: Nous y allons → We're going

However, when a prepositional phrase starts with: en or de, you cannot replace it with "Y", even if it does indicate a place. But, "Y" is not used just for location, it's also used to replace the phrase that has a pattern of à, which is a thing.

Example: J'y pense → I think about it

So, no, it can't only be used to replace the names of places. It can replace things too. 

I hope I helped :)