The history of formal pronouns (du/sie) is also very interesting in German. As far as I remember, in the middle ages the third person singular ("er/sie", he/she) was used as a formal address for common people. Nobility used the majestic plural ("ihr", you/y'all). Now with the rise of the "Bürgertum"* in the 18th/19th century, people wanted to distinguish themselves from the peasants with their "er", but the distancing tone of the third person fitted well with their spirit. They also wanted to get rid of anything reminding them of nobility with the "ihr" address, but it seems they wanted their own bit of majestic plural and kept the plural form. So they basically invented using the third person plural "sie" (they) as a formal "you". The old forms now sound incredibly archaic, although they are still used in some dialects according to wikipedia. I also have to say that this story is very condensed and was probably more complicated in reality, as I am not a linguist.

               singular plural (majestic)
    2. person  du       ihr
    3. person  er       (sie)   
    (distancing)

(*"Bürgertum" means ~middle class, but I find it hard to translate accurately, "Bürger" means citizen or bourgeouis.)