In biological terms, sex may be determined by a number of factors present at birth, including:
the number and type of sex chromosomes; the type of gonads—ovaries or testicles; the sex hormones; the internal reproductive anatomy (such as the uterus in females); and the external genitalia.
People whose characteristics are not either all typically male or all typically female at birth are intersex.
My concern is that people are attempting to use the existence of intersex folks (at widely varying claimed incidence rates) to make faulty arguments about what is and is not normal physiology.
The criticisms are more about terminology than the core argument though - they mostly argue that "intersex" should only cover a small number of conditions that result in an arbitrarily substantial differentiation from a "normal" male or female, rather than any significant differentiation. So if the question is about sexual dimorphism, those criticisms are mostly irrelevant.
But here's a question: why is it important that they can reproduce? Gay men and women are unlikely to reproduce either, so should we ignore them in policy-making too? Are gay people abnormal?