There are two kinds of images based on their reusability:
- Free images, which may be reused by anybody for anything (including commercial reuse and/or derivative images). There are two kinds of free images depending on whether they are copyrighted or not.
- Free license images, for which the copyright owner has granted a license for reuse by anybody for anything. If one were to make a photo for Wikipedia, they would license it under a free license. But most professional photographers will not license their work under a free license. When the user uploads the image with permission of some other copyright owner, Wikipedia needs to check that the owner licenses reuse by anyone for anything; otherwise it is not a free image.
- Public domain images, for which the copyright has expired or for which the copyright owner has explicitly released the copyright. Some people think that a work they find on the web is in the public domain, but this is not true: almost everything on the web is copyrighted. Some people think that a work is in the public domain unless a copyright is claimed, but this is not true: a work is copyrighted unless the copyright is explicitly released. Works by the U.S. national government are by law in the public domain. The question of when copyrights expire is complicated, and it depends among other things on when and where they were first published.
- Non-free images, for which the copyright owner has not granted a license for reuse by anybody for anything. Images for which the owner agrees to their use only on Wikipedia are non-free. Because Wikipedia policy favors reusable content, Wikipedia strongly discourages the use of non-free images; they may be used only under special circumstances. (See WP:NFCC)
- A non-free image may be used only under a fair use doctrine. This means that Wikipedia ignores any permission the owner has given, relying only on a right of free speech.
- A non-free image may not be used if a free equivalent is available. And yes, that does mean that a free image is preferred to a much better non-free one.
- A non-free image may be used only if it significantly improves the article where it is used. Non-free images may be used only in articles—not on user pages. They may not be used merely to decorate the article; they must be pertinent to the text; and they must convey more than can be conveyed by just text.