At first this question seem simple, from all the real life examples I have seen, is used for displaying icons. For example the twitter bootstrap icons.
However, when I search tag in google, the w3c school says is for italic text.
I am confused, if is used for italic text, why is everyone using it for icons? What is the proper use of this tag??
It should be used to make text styled italic. Most semantic uses for italic text are <em>, as it is supported by screen-readers for emphasis.
<i> and <b> are slowly going out of fashion in favour of using CSS to style text, and preserving <em> and <strong> for accessibility reasons.
I guess that it was selected for icons since it is the closest element and makes alphabetic sense (i.e. i = icon).