It was designed by Bruce Schneier, John Kelsey[?], and Niels Ferguson of Counterpane Labs[?], and described in the 1999 paper Yarrow-160: Notes on the Design and Analysis of the Yarrow Cryptographic Pseudorandom Number Generator presented at the Sixth Annual Workshop on Selected Areas in Cryptography, Springer Verlag, August 1999.
The Yarrow algorithm is explicitly unpatented, royalty-free and no license is required to use it.
The name is taken from the yarrow plant, the stalks of which are dried and used as a randomising agent in I Ching divination.
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