The word sic is Latin and means thus. I don't usually quote Wikipedia as I don't feel Wikipedia is an authoritative reference and contains many errors. In addition Wikipedia can lead people to incorrect information as it doesn't qualify the information sufficiently in many cases and rarely for Australian usage. Thus Australians can mistakenly use Wikipedia as a reference think they're correct, but they end up using American English. However, in this case the entry in Wikipedia beings with, The Latin adverb sic ("thus"; in full: sic erat scriptum, "thus was it written") and I thought that information was worth sharing.
What this is saying is, the writer of the article wants to show the quote is being written as it was originally written and that the writer has not introduced an error. The effect of sic is to call attention to the reader the original text may have a spelling, grammatical error, or perhaps some other issue the reader is to be made aware off.
The Wikipedia entry also mentioned another point I found very interesting. In America the general convention is to place the word sic within square brackets, whereas in Britain the convention is to use parentheses or as some like to call them, curved or round brackets. A check of the Macquarie Dictionary does not provide guidance on formatting, but The Australian Oxford Dictionary provides an example shows round brackets are used.
The word sic being a foreign language word is often written in italics. The word sic is not an abbreviation and thus sic should not end with a full stop.
For me this information is great to know. I've often had the need to quote text which contains an error and on the one hand, I don't wish to change the text as that is not how it originally appeared, but on the other, I don't want to share an error which may mislead people. The word sic however does have one drawback that needs to be considered. When you point out an error in text by others, in effect you can end up diminishing the perceived value of the text. For some that will be helpful, but for others they will see this as the writer being condescending. You won't be able to keep everyone happy. My feeling is, if you can contact the original writer ask if it is OK to change the text. If you can't contact the writer, then it is probably better to use sic. I think it is better to aim for higher standards and lead by example. You never know when someone reading your work will benefit from what you've learnt.
Creator of the preferred Australian English spelling dictionary.