Thou/thee/thy/thine are singular forms, whereas you/ye/your are plural. Just as we and our became royal pronouns, where a monarch would emphasize that they spoke for a whole country by referring to themselves in the plural, it became popular for the upper and eventually middle classes to refer to each other as plural, as a more respectful or formal usage.
"Following a process found in other Indo-European languages, thou was later used to express intimacy, familiarity, or even disrespect, while another pronoun, you, the oblique/objective form of ye, was used for formal circumstances"
Interesting - I've read that the common pronunciation where we use "Ye" pronounced as "Yee" is a mistake - it was always pronounced "The"
It's a vestige of how the Thorne transformed over the years - eventually it looked very similar a Y with a small "e" above it... leading to someone looking at an old document to assume it was just a Y.
We could be talking about two separate uses of the word though....
Quoting from Wikipedia (http://en.wikipedia.org/wiki/Thou):
"Following a process found in other Indo-European languages, thou was later used to express intimacy, familiarity, or even disrespect, while another pronoun, you, the oblique/objective form of ye, was used for formal circumstances"