A pirate station is a radio station that is on the air illegally because it doesn't have an FCC license. The fact that you, on a radio board, asked what a pirate station is despite context that might suggest it's illegal, means that most of the general public doesn't know what a pirate station is. Touch 106.1 sounds so professional, it's often mistaken for a licensed station by the public.
Forget about the rest of New York City, just Newark, NJ has pirates on every available frequency, and on some frequencies, there are multiple pirates that interfere with each other. Brooklyn is just as bad, and so is the Bronx. The FCC doesn't even know about 95% of the pirates that exist, so how can they get busted? The ones the FCC knows about just get a little letter begging for $10,000, but the fines are never paid or collected. If the FCC does visit a station, all they do is take field strength readings and look at the transmitter and antenna system, the pirate usually remains on the air the whole time!
I wish they would let people like us volunteer to help locate and shut down the pirates. There are many people who would do it for free; engineers of licensed stations, listeners who get interference, police officers, radio geeks, etc. It's easy to locate a pirate with a portable radio, and 50 people including cops at the door of a pirate station will ensure that the owners don't fight. They should raid the stations that sell advertising and are obviously aware they are illegal and cause interference, and leave the iPod transmitters attached to a coat hanger alone.