Loyal is a conceptual role modifier, originally designed by Kaiveran while investigating possible roles that might be of use to C18++. If a player is Loyal, then any attempts by that player to use a night action on a player with a different alignment will fail (as though they had been roleblocked). As such, a Loyal player can only succeed with actions when targeting a player of the same alignment.
Loyal is an acceptable modifier under Normal guidelines on mafiascum.net, when used on an active role belonging to a player of any Town or Mafia/Werewolf alignment. It causes the role to behave as though it were roleblocked unless the target has the same alignment as the user.
Use and Power
There are two main influences a Loyal role can have a setup.
One is to avoid combinations of actions that the moderator feels would be overpowered, underpowered, or excessively swingy. If a member of the Mafia has a Loyal role, then they will know who they can and can't use it on (thus making the ability entirely Negative Utility in this case); the original example was a Mafia Loyal Jailkeeper, intended to help the team out slightly by allowing them to save other Mafia members from the nightkill of rival factions, at the cost of losing their night actions for the night. Without the Loyal modifier, that role would be considerably more powerful, effectively giving the Mafia a Roleblocker. This kind of "toning down" of actions can happen in the Town too; a Town Loyal Tracker (using the abNormal variant that cannot distinguish a blocked action from a no-kill) will be unable to catch a player performing the kill, thus removing the highest-variance outcome, and thus making the role considerably less swingy (in addition to making it considerably less powerful, as the removed outcome is very good for town).
Alternatively, there are cases in which a role can be made more powerful via the addition of this modifier; a Loyal Doctor is better in town's hands than a regular Doctor, and potentially gamebreaking if a Vigilante is available to shoot at the loyal Doctor's targets. In general, if you have a Loyal role as town, consider whether it's possible to gain investigative-style information from the fact that the role fails on anti-Town players.