I think that "thou" was used along with "you". "Thou" was the singular "you", or addressing just one other person, whereas "you" was the plural, when addressing more than one person. However, I think that "you" was also used to address individuals in a formal way, which muddied the waters. Gradually, usage changed until people used "you" exclusively, to address both individuals (formal and informal) and groups.
French still distinguishes between tu (singular) and vous (plural/formal). German, too, makes a distinction, I believe. Japanese apparently has a whole bunch of different modes of address, with various degrees of formality.