What is meant by modularity in an XML schema? i.e. given an xsd, what could be done to make it modular?
I would measure modularity by the reusability of the components and the strength (or rather weakness) of their coupling. For example a schema in which the complex types are named, and referenced from the element declarations, is more modular than one in which the types appear inline within the element declarations, because the types can then be reused for other elements (perhaps after refining them by extension or restriction).
Some people might look at modularity more at the level of schema documents (and therefore xs:include), but I think that's probably less important.
Of course, breaking up a system into the largest possible number of the smallest possible components is not necessarily the right thing to do; there are other factors to consider.