A software licence (or software license in United States English) is a kind of licence that is used to set rules about how a piece of software can or cannot be used. After getting the software by either downloading it or buying it, you need to agree with the licence in order to use it. The licence is chosen or created by the software developer/creator or software publisher. Many licences answer questions such as "can I use this software commercially/to make money?", or "can I give this software to other people?", or in general, "in what ways am I allowed/permitted to use this software?".
One kind of software licence, an end user licence agreement, or "EULA", is very specific/descriptive about the things that you can or cannot do with the software, and oftentimes establishes/defines the rights of the software developer over the user. Most EULAs are written by the specific software developer and are not shared like other software licences.
Another type of software licence is an open source distribution licence. These licences let software developers choose what people can and cannot do with the code of the software. There are many licences freely available which allow you to do this, such as the MIT Licence, which allows for the software to be used by any person for any reason/purpose. The GNU General Public Licence, often abbreviated/shortened as GPL is a licence which makes all copies of the software free and open source. Therefore, GPL cannot be included in any part of proprietary/closed software because it does not follow the rules of the licence. The Apache Licence is more definitive and specific, but is more common with larger companies, such as Google, but is still considered a free software licence. Creative Commons is a popular licence used by people who want to give something out for free without taking as much credit. Creative Commons is very open, and is even used by Wikipedia for its pages and other content.
Software licence Facts for Kids. Kiddle Encyclopedia.