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The word sic may be used either to show that an uncommon or archaic usage is reported faithfully: for instance, quoting the U.S. Constitution:

The House of Representatives shall chuse [sic] their Speaker...

or to highlight an error, sometimes for the purpose of ridicule or irony, as in these examples:

Warehouse has been around for 30 years and has 263 stores, suggesting a large fan base. The chain sums up its appeal thus: “styley [sic], confident, sexy, glamorous, edgy, clean and individual, with it's [sic] finger on the fashion pulse"

It is also sometimes used for comic effect:

The Daily Mail was the first newspaper [sic] …

If text containing a quotation is itself quoted in a third text, it may not be possible for a reader to tell whether any "[sic]" in the inner quotation was added by the writer of the second text or the writer of the third text, or whether the anomaly highlighted was introduced by the first writer or the second. One way to show the source is to add "(bracketed material in original)" or a similar parenthetical reference at the end of the quotation.