You will get a "Tool Not Licensed" error when trying to use an ArcGIS Tool, such as Create TIN or Flow Direction, and the ArcGIS Extension that the tool is part of is not enabled.
To use the tool you must active the extension. The error dialog should inform you which extension the tool is part of. In this case the Flow Direction tool is part of the Spatial Analyst extension, whereas the Create TIN tool is part of the 3D Analyst extension.
To enable extensions, select Extensions.. from the Customize menu and check the extensions that you need. The tool should now work.
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