The term isn’t used to define everyone who isn’t a manager. It’s used to define people like Lead and Principle Engineers who are a subject matter expert, have influence in defining a project, but have chosen to continue in engineering roles rather than switching to management. Often their position in the company is parallel to the managers rather than subordinates, hence the “individual” part of the term.
ICs are generally considered highly valued staff.
This requires the intentionality of the organization though. They seem to default to managers make the decisions. Ideally, managers manage people, IC execute and you get the "right" people in the room to make decisions, regardless of title or track.