A vague pronoun is a pronoun that is seen when a pronoun in any sentence is refering to more than one possible subject. In the example given, the vague pronoun here if the pronoun
They
In my school, they let us wear school colors on Friday.
In this sentence, they could refer to the school authorities, the teachers, or even the student prefects. So, the pronoun "they" is the vague pronoun in the sentence.