There are a few varying definitions of shareware put forth by various 
organizations that can be found and read. The definition I set forth
below is from a practical experience of shareware over many years and is
only meant to guide the would-be shareware author.

Shareware is at once a type of software and a means of distribution of
that software. The author of the soteware gives the users of the
software a license to try an evaluation version, the software for a
specific time span, usually for 30 days. After the evaluation period, if
the user wishes to continue to use the software, the user is required to
register with the author by paying the author a fee. This is often said
to be the "try-before-you-buy" method. If the evaluation period lapses,
and the user does not register the software for further use, the user is
expected to discontinue use of the product and erase the product files.

The software program is usually packaged in a compressed archive. This
keeps all the files that comprise the program together and allows for
easy downloading of the package from posting sites.

The conditions of use, registration and allowed distribution of the 
evaluation version, are generally given in a text file included with the 
program.

A shareware program, in the pure original ideal, should not be crippled
or limited in it's functions, however in practicality, the term
shareware has come to encompass programs which use registration
incentives such as operational time limitations, registration nags, full
feature release through registration keys, and other such devices meant
to give incentive for the user to abide by the registration license.

Shareware, as a distribution method, is the author allowing by license,
the public to copy and share the program with others for their own
evaluation. The methods of sharing is the distribution process and may
include copying of the distribution archive to disks, CD-ROM
collections, posting for downloading at BBSes, online services and
Internet sites.  The author may set limitations to distribution methods.
The distribution methods and any limitations may be given in a text file
included with the program.

Shareware works largely on the honesty factor in people. It relies
mainly on the conscience of the individual to eventually do the right
thing in order to continue use of the program.  It completes a trust
that the author initiates releasing the program via the shareware
method. The author's success is not only dependent on the usefulness of
the program and it's distribution, but the conscience of the person
using it.