While I know technically the English language has a distinction because when there's a conflict between the possessive form and a contraction, the contraction wins. That is:
- Its is the possessive form of it—and this will presumably be followed by some form of noun spec or something.
- It's is short for "it is" or "it has" (as in "it's been years since...").
The rule of thumb I use to remember this is that it follows the same pattern as whose and who's, for which the correct use is much more obvious.
While technically I see why there's (ha ha) a distinction, I can't think of any case why it really needs to be there, because for every use of either construct, the meaning intended is usually (if not always) obvious from context. Case in point: many questions and answers written on the network are written incorrectly, yet nobody notices or cares. (Usually in my case, I default to "it's" then realize I screwed up)
As a single word, I could see why it'd be ambiguous, but I don't see why in typical prose it would matter.
Is there a specific reason for this in earlier dialects of English, or specific cases where choosing the incorrect form leads to lack of understanding of a particular sentence?
Answer
It's not about a contraction "winning" over a possessive. "Its" is the possessive form of "it", like "his" is of "he", "her" is of "she" or "their" is of "they". There is no missing apostrophe; the forms go back to a time when English was a highly inflected language. It predates modern, or even Middle, English.
The possessive formed by the apostrophe+s construct is a more modern, uninflected, less-marked form. There are only a very few commonly used words — pronouns — that still use the older forms. Markedness tends to survive in words that are used very frequently, even when other aspects of the language are losing their markedness. It's the same reason why we still say "men, women and children" rather than "mans, womans and childs" when the plural ess marker is nearly universal in the rest of the language.
