A pencil was a device used to write found on Earth.
An HB pencil was made from graphite. Another type of pencil was 4H. Certain pencils, known as "coloured pencils", came in many colours, including blue, green and red. The ends of certain pencils featured rubbers, or erasers, which could be used to erase graphite marks made. (TV: Fear Her, The Runaway Bride)
Pencils had other uses as well, such as the basic function of a stick. The Tenth Doctor once used one to extract a sample from a Vespiform sting, and Agatha Christie had earlier used the same pencil as a pointer. (TV: The Unicorn and the Wasp)
When, in 2012 London, the Isolus took over Chloe Webber, a lonely child, Chloe began drawing people and objects — snatching them from space-time, and sucking them into her paper. She did this under the influence of the Isolus, who was lonely as well, trapped away from her family of around four billion. Not only could Chloe suck living organisms into drawings, but she could also create organisms from drawings, as she did with the scribble creature, a creature made entirely from graphite, and her father. The Isolus, with Chloe unconscious, showed a skill of pencil drawing quite capably and quite quickly. Trish Webber, her mother, would hide her pencils, but she kept a secret stash in a doll. The Isolus was eventually freed when the Tenth Doctor and Rose Tyler found its spaceship, and Chloe was no longer capable of extracting life through drawing. (TV: Fear Her)
The Tenth Doctor once used a pencil to demonstrate how the Huon particles in the heart of the TARDIS were attracted to the identical particles in Donna Noble, using a mug to represent the TARDIS. When Donna, shocked, questioned, "I'm a pencil inside a mug?" the Doctor joked, "Yes, you are. 4H — sums you up." (TV: The Runaway Bride)