As software is protected by copyright, the author of a computer program must give third parties permission before they can install or distribute it. This even applies if the author does not charge for the program. Such a permission is called a license. Licensing a computer program can be done in a variety of ways, and there are few restrictions on what you can put in such a license.
Many licenses -in particular licenses for commercially developed software- tend to be quite restrictive with respect to any rights on redistribution, modification and reverse engineering of the program granted to a licensee. In contrast, so-called open source software and free software (free as in "free speech", not "free beer") grant users a much broader set of permissions. Choosing the right license is very important when releasing a computer program.