From what I recently read in several places, historically, the riddle
is told incorrectly, which is partially why everyone gets so confused
about it.  In its original form it makes much more sense and can
actually be solved, though there is some clever deception in the
paragraph.

I will put the original riddle here, and then at the end, I show it
solved.

"Think of words ending in -GRY.
Angry and hungry are two of them.
There are only three words in the English language.
What is the third word?
The word is something that everyone uses every day.
If you have listened carefully, I have already told you what it is."

The first two sentences are there to throw you off.  Do they ever
ACTUALLY say that there are 3 words in the English language that end
with GRY?  No.  They say, think of words ending with GRY.  So, think
of them, but not in regards to the answer.  There may be a variety of
words in the language ending with GRY, but what they are asking you
has nothing to do with the letters GRY.

What is the solution you ask?  Let's take out the first two sentences
as they are only there to throw you off.

"There are only three words in the English language.  What is the
third word?  The word is something that everyone uses every day.  If
you have listened carefully, I have already told you what it is."

Ok, so the actual literal phrase to look at is "the English language".
Let me restate it here to make it obvious.

There are only three words in, "the English language".

Well that is true.  In that phrase, there are only three words.  The
third word of the phrase is........ language - and that is the answer.
Look for web sites pertaining to the history of the riddle to get the
full description, but I think I pretty much covered it here.

From: Ben Clayton <benjclayton (at) home.com>