A package store (or packy if you are from The Hub), is where you go to buy your liquor (lickah). You could say that a Package Store is a liquor store, and you would be right.
It is often said to be a feature of the Massachusetts dielect, however I have seen the words "Package Store" on a liquor store in Virginia recently, so it does not apear to be the case.
The term has fallen into
disuse in recent years, and is mainly used when doing impressions of a hard core south boston accent, usually in the form of "Im goin on down to tha packy to get me some lickah paly".
To be very specific, a package store is a store that sells Alcohol in "packaged form"; meaning that it is not in an open container and is being sold with the intent that it is consumed somewhere else.