"Open Source" describes the way, the software is licensed.

Basically there are the 4 different licensing types available for software today:

• Proprietary Software: buy it, then you can use it, but you cannot do anything else with it.
  
• Shareware: basically it's proprietary software, but you can try it before the author wants you to buy it.
  
• Freeware: you can copy and use it for free, but you don't get the source code, so you can't change it.
• Open Source Software or Free Software: you can copy both, the software and its source code, use it and change it as you wish - this gives you the most freedom!

 Definitions of Open Source / Free Software and most common licenses are published by The Open Source Initiative (OSI) .