> Which is of the following is correct and why?
>
> a) The field hockey squad looked great in its new uniforms.
> b) The field hockey squad looked great in their new uniforms.
>
> Thanks.
Both.
The first is far more common in US English, the second more common in
UK English. Very rarely, an American English language test, or
something like the GMAT, will force you to choose between these two
alternatives, with the former being the only correct answer available.
There are some gray areas, most notably the words "family" and "team,"
but in general, American pedants are stickier on this than British
ones.
This grammar issue is generally called "notional agreement." You should
be able to find lots of information on "why" if you Google the term.