The Mercurial license is GPLv2

[Matt Mackall]

All the core source is marked as GPLv2-only by referencing only COPYING
and not allowing for later versions. Some small parts of it are
available on their own under GPLv2+:

hgext/color.py
hgext/convert/transport.py
hgext/purge.py
mercurial/byterange.py
mercurial/keepalive.py
mercurial/simplemerge.py
tests/test-simplemerge.py

But if you make a derived work of any of these files and, for instance,
revlog.py, the only license that covers both is GPLv2. Thus Mercurial as
a whole is GPLv2 only. 

Mercurial was created when the GPLv3 was being drafted. I was part of
the pre-GPLv3 discussions with the FSF and wasn't particularly pleased
with the direction (or eventual outcome) so I decided it was safest to
stick to v2 only. 

It may or may not be legally or practically possible to change the
license to allow v3 at this point, but I'm not particularly interested.

The wiki originally pointed to GPLv2 at the GNU project, but at some
point after GPLv3 was released, they changed the link contents out from
under us. How rude! The wiki now points to COPYING as provided in the
Mercurial source.

-- 
Mathematics is the supreme nostalgia of our time.