A plural pronoun in a text can refer back to a group that has been introduced by a singular noun. I think, there is no strong reason to expect that English and German would differ here, for it is no longer a question of grammar. (Such phenomena are called "bridging" in linguistics; you refer to an idea that has been evoked by previous text, not to the earlier expression – people would forget it anyway in the course of a longer text).
No problem at all in: "Das Holde Volk zeigt sich selten. Man kann sie nur dann sehen, wenn sie gesehen werden wollen." It is even better this way, because what you might see is always a number of individuals, not the "Volk" as a whole. But note that I inserted a full stop... within the same clause the German-English grammatical difference may apply, hence: "Das Holde Volk zeigt sich selten und ist nur dann zu sehen, wenn..."
PS: Interestingly, I get a worse result for: "Das Holde Volk zeigt sich selten. (?) Sie sind nur dann zu sehen, wenn..." Just my intuition: I would rather avoid this version although readers can perhaps be pushed to accept it. My guess is that it is because of the parallel structure: From the subject pronoun in the second sentence, you instinctively look back to the previous subject for resolution, and then you notice that the number feature differs. So bridging works better when the connection between sentences is loose and distant.
Incidentally, Germans have similar problems in cases like "Das Mädchen ... Es/sie..." The grammar book of your choice might say something about this problem, and it should be fairly analogous.