people, peephole

People or people means human beings, in a general sense, or as a plural form of  "person"--
How many people are in the waiting room?
There are more than seven billion people on the planet.

Peephole or peephole ( almost rhymes with people ) means a small opening used to look out of a door, into a room, or through a fence or wall--
Don't open the door unless you look out of the peephole first.
They cut a peephole in the fence to watch the construction project.

Now that you know that, you can say--
"He often looked out of the peephole in the door, just to watch the people passing by."

Note--"people" may mean a race or religion, and as such has a plural, "peoples"--
Our government made separate treaties with the different native peoples.
The UN Charter declares the right to the self-determination of peoples.
Note 3 2--"Person", meaning one human being, also has a plural, "persons", used most commonly in legal records, when the number of persons, each an individual case, is unknown--
The crime was committed by a person or persons unknown.
Call the bureau of missing persons.
Note # 3--"person's" is the possessive ( belonging to ) form of "person"--
Americans are taught to respect a person's right to religious liberty.
Note # 4--"people's" is the possessive form of "people"--
This candidate is clearly the people's choice.