When you purchase software, you receive a copy of the software and a license to use it. You don't actually own the software — ownership rights belong to the software company, and you're still limited by the terms and conditions of the license.
A software license gives you the right to use a software product. It also governs the use of the software along with the copyright laws, which prevent the unauthorized distribution or reproduction of the software. A license might also specify, among other terms and conditions, whether or not you may install the software on more than one computer and whether or not you can create backup copies of the software.
Even free software, otherwise known as freeware, might come with a license that dictates its use. This is generally in order to prevent a user from altering the software in an attempt to resell it.
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