In a nutshell: The play takes numerous liberties with the historical record (though strives to preserve the spirit of these events) in order to present an artistically satisfying narrative.

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Read Sherman Edwards and Peter Stone's full addendum regarding the play's historical accuracy

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Highlights from the essay:
 

• "Certainly a few changes have been made in order to fulfill basic dramatic tenets. To quote a European dramatist friend of ours, 'God writes lousy theater.' In other words, reality is seldom artistic, orderly, or dramatically satisfying; life rarely provides a sound second act, and its climaxes usually have not been adequately prepared for. Therefore, in historical drama, a number of small licenses are almost always taken with strictest fact, and those in 1776 are enumerated in this addendum. But none of them, either separately or in accumulation, has done anything to alter the historical truth of the characters, the times, or the events of American independence."
   

• "We have attempted, in the paragraphs above, to answer the question, 'Is it true?' What we cannot answer, however, is how such a question could possibly be asked so often by Americans. What they want to know is whether or not the story of their political origin, the telling of their national legend, is correct as presented. Don’t they know? Haven’t they heard it before? And if not, why not? As we say, it’s a question we cannot answer."
   

• "It is presumptuous of us to assume that 1776 will be able to fill even a portion of this lamentable void (though doubtless no small portion of its success is due to the “new” information it offers); the crime is that it should even have to. The United States owes its citizens, at the very least, an educational system that describes, defines, and explains our own existence."
   

(The full essay, which we were quoting above, can be found here.)

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The essay linked above goes into examples of what is accurate and what isn't. Throughout this website, you'll find more in-depth discussions in the relevant sections about specific examples that Edwards and Stone raised.