"It" is more of a dungeon hazard or status effect rather than a monster. It's an invulnerable shining globe that tries to chase down the closest hero. Upon contact, that hero will be declared "It" and attract the deadly attention of every monster. Whomever is It can pass off this status to another hero simply by touching them, thus refocusing the attention of monsters. Clever heroes can put this to an advantage by herding monsters away from treasure or exits. The only way to remove It is to find an exit.
It only appears if there are multiple heroes adventuring together.