A policy expresses a set of requirements or rules that service consumers usually must adhere to in order to invoke and interact with a service. We use the term “usually” here because you can have optional policies, ignorable policies, and even policy alternatives that give you, as the policy author, a great deal of flexibility as to how policies can extend published service contracts.
It is common to run into policies that apply to more than one service. In this situation, it is generally not desirable to redundantly implement these policies across multiple service contracts because, as with any form of redundancy (data, logic, etc.) within the IT enterprise, it places a governance burden upon us to keep the content of those policies in synch over time. For example, when the policy changes, we need to update all of the service contracts that contain the policy in order to ensure that the change is fully applied. Even then, having redundant policies can be risky because you may have different people performing the update, resulting in different results.