Snap and grid

Points you click are moved to a nearby position, so lines meet and shapes line up.

Point Posn and Grid Mode

Point Posn (indicator) sets the step that coordinates are rounded to: any (no rounding), 1/16, 1/8, 1/4, 1/2 or 1 inch (1, 2, 5 mm, 1, 2 cm in metric drawings). xfig starts with 1/16 inch, its "magnet".
Grid Mode (indicator) chooses the grid spacing and style, or none: xfig's nine choices, four square grids and four isometric ones (indicator.set with grid and grid_iso; resource startgridmode 0 to 8). On an isometric grid the columns are cos 30 degrees of the spacing apart and every other column is shifted by half a spacing; points snap to those crossings (the spacing is the Point Posn step). The grid is shown on the canvas and points snap to it (View > Show grid, Ctrl+').

Pressing the middle button in the move modes (horiz/vert) constrains the move after snapping.

The Snap menu arms a snap for the next point you click:

Snap	Snaps to
Endpoint	the end point or vertex of an object
Midpoint	the middle of a segment
Nearest	the nearest point on an object
Focus	the focus points of ellipses
Normal	the foot of a perpendicular from the previous point
Tangent	a tangent point from the previous point
Intersection	where two objects cross
Diameter	the opposite end of a circle's diameter

Hold keeps the chosen snap after each point until you pick Release. The Snap Mode box next to the menu says which snap is armed.