License:

-pic is free software in the sense that it is available under the following license conditions:

$\displaystyle \xy$* + $\displaystyle \txt$$\displaystyle \XY$-pic:GraphsandDiagramswithTEX
© 1991–1994    KristofferH.Rose*$\displaystyle \frm$-$\displaystyle \xy$

The -pic package is free software; you can redistribute it and/or modify it under the terms of the GNU General Public License as published by the Free Software Foundation; either version 2 of the License, or (at your option) any later version.

The -pic package is distributed in the hope that it will be useful, but "without any warranty"; without even the implied warranty of "merchantability" or "fitness for a particular purpose". See the GNU General Public License for more details.

You should have received a copy of the GNU General Public License along with this package; if not, write to the Free Software Foundation, Inc., 675 Mass Ave, Cambridge, MA 02139, USA.
In practice this means that you are free to use XY-pic for your documents but if you send parts of the "source code" of XY-pic (or modified versions of it) to someone then you are obliged to ensure that the full source text of XY-pic is available to that someone (the full text of the license explains this in somewhat more detail  ).