Is Improved Town Industries free?

Yes. Improved Town Industries is released under Open Source / Community and costs nothing. Neither it nor OpenTTD has any paid content.

What do I need to run Improved Town Industries?

OpenTTD, which is itself free. Improved Town Industries is an add-on and will not run standalone.

The PlayBound Launcher installs it in one click from OpenTTD's mods list. You can also install it by hand — full steps are on this page.

Roughly 12 MB, on top of the base OpenTTD installation.

Yes. The source is published at github.com/2TallTyler/improved_town_industries under Open Source / Community.

Improved Town Industries — Free OpenTTD Mod · PlayBound