Demonstratives are pronouns used to distinguish between nouns.

Demonstrative pronouns are used to point out or specify a particular noun. For example, look at a child in a toy store:

I want that toy.

In this sentence, the pronoun that points out (or demonstrates) which toy the child is talking about, distinguishing it from all other toys.

Demonstratives are classified in two dimensions, near and far. This/these are used for near, while that/those are used for far. Look at the difference in meaning between these two examples:

I want this toy. Near

I want that toy. Far

In the first sentence, this indicates that the toy is near the child, or within his reach. In the second sentence, that indicates that the toy is some distance away, or out of the child’s reach. These and those are used in the same way if the object is plural. For example:

I want these toys. Near

I want those toys. Far

Demonstrative Pronouns as Adjectives

Demonstratives are interesting pronouns because they are often used before a noun to distinguish it from other nouns. In this sense, they work like an adjective. For example:

Emily will win that prize.

In this sentence, the pronoun that is used to modify the noun prize, just like an adjective.

More examples of demonstrative pronouns acting as adjectives:
Hand me that pen!
Those rings are nice, but Emily wants to buy these rings.
They threw this ball at him.

Demonstrative Pronouns as Pronouns
You now know that demonstrative pronouns can act as adjectives, but they also act as pronouns. For example:

That is the best hot dog ever!

In this sentence, that is acting like a regular pronoun, replacing the subject of the sentence. However, it is still demonstrative because it demonstrates which hot dog is the best (that one!).

As with all pronouns, sometimes you will need to depend on context to determine a demonstrative’s antecedent. For example:

Don’t step on those!

Without more context, it is impossible to determine what exactly those are—they could be anything! However, look at this example:

Some tiles are loose. Don’t step on those!

With the context of the first sentence, we can see that the only logical antecedent for those is tiles. By using those, we are able to specify that the tiles you shouldn’t step on are the loose ones.

More examples of demonstrative pronouns acting as pronouns:

Those are not very good steaks.
That is a dangerous cliff.
I don’t like these.