A Peering Policy is an articulation of a Peering Inclination, articulated either publicly or protected under a Non-Disclosure Agreement.
There are essentially four categories of Peering Policies:
Definition: An Open Peering Policy is an articulation of an inclination to peer with anyone.
Definition: A Selective Peering Policy is an articulation of an inclination to peer, but with some conditions.
Definition: A Restrictive Peering Policy is an articulation of an inclination not to peer with any more entities.
Definition: A No-Peering Policy is an articulation of an inclination not to peer at all.
It is important to note that these Peering Policies are not absolute and discrete measurable categories. We tend to see broad categories and Peering Policies articulated across the spectrum as shown below. Further, one ISP might view their Policy as Selective while everyone else in the ecosystem views it as Restrictive.
Questions to ask to determine where a Peering Policy is in the spectrum:
1) Who does this ISP peer with?
2) Who has this ISP added recently as a Peer? A Restrictive ISP will generally not add free peers over time.
3) Are the Peering Policy requirements met by the ISP that proposed them? Some Restrictive Peering Policies articulated are not even met by the ISP proposing them!
4) How often are the Peering Policy requirements changed? It is rumored that the policies of Restrictive Peering ISPs change as soon as they get a request that meets the posted policies, reflective of the desire not to peer.
Vijay Gill made the case at a NANOG Peering BOF run by the author that Peering Inclinations tend to go through a lifecycle, documented now on this site.
You might also find interesting the study of 28 Peering Policies which highlights the common Peering Policy clauses found across the net.