To what does the title of this book refer?

Kosinski's title, The Painted Bird,
refers to a form of animal torture a character uses in the novel.  If you haven't read
it, you should stop reading this answer now and read it yourself.  It's as good as it
gets. 

A character literally paints a bird, so that when he
releases it and it flies back to its flock, its flock will reject it, attack it, and
kill it. 

It's a symbol of how humans treat other humans. 
The twentieth century is nothing if it is not an example of advances in how one set of
humans can mistreat and be cruel to another set of humans.  Never before have humans
been so efficient at killing one another.  This novel demonstrates one historical
instance of this--WWII.  It centers on the little discussed fact that Nazi-like ethnic
cleansing occurred all over Central and Eastern Europe during the war, not just in Nazi
concentration camps.  And this "cleansing" was performed by neighbors, village leaders,
every day people, not just Nazis. 

Anybody different,
anybody "painted," is at risk in our world, as well as in the world of this novel.