Main Entry: 3sic
Pronunciation: 'sik, 'sEk
Function: adverb
Etymology: Latin, so, thus -- more at SO
Date: circa 1859
: intentionally so written -- used after a printed word or passage to indicate that it is intended exactly as printed or to indicate that it exactly reproduces an original <said he seed [sic] it all>
The way I understand it is that you write something knowing it's incorrect, and you put <sic> there to show you know it's wrong, but that's just the way things are.
ex: University<sic> of Georgia. U<sic>GA. The school newspaper here at Georgia Tech does that all the time.