In oivate, a lot of stories are told in South America about grisly torture techniques and pictures circulate of men and women with cigarette burns and black-and-blue marks all over their bodies.

But it is highly unusual for newspapers in countries like Argentina Uruguay and Chile, where there is strict press censorship, to be allowed, even encouraged, to publish a picture such as the one that appeared recently in three Montevideo daily papers.

The picture was taken in Uruguay's Supreme Military Tribunal, where seven Tupamaro terrorists had been brought for sentencing, convicted of murdering peasant who had stumbled onto an arms cache belonging to the Tupamaros in 1971.

The six male and one female prisoners, who have already spent five years in jail, looked nothing like violent guerrillas.

Their heads shaved, their faces gaunt and their bodies lost in ill-fitting blue prison uniforms they looked as if they were barely surviving. They served their time in on of the several large prisons, such as La Libertad on the outskirts of Montevideo, where 1,800 political prisoners . . . by official count - are held.

The picture and the sentencing, which were given front-page treatment, had a symbolic meaning far more important than the fact that the six will spend an additional t to 30 years in jail.

First, the sentencing was another reminder to the population of fewer than 3 million that the Tupamaros, owh once caught the world's attention with their daring bank robberies and political assassinations, including the 1970 kidnap-murder of a U.S. police training expert, have been destoryed.

Indeed, the Tupamaros, whose revolutionary terrorist campaign to overthrow Uruguay's democratic government led directly to the current rightist military control, were all killed, captured or forced into exile by late 1974.

Second, the sentencing showed that more prisoners at ast are being brought to trial and either sentenced or released. This is most important to diplomats whose governments are concerned about human rights violations - and to the Foreign Ministry, which seeks to repair damage that the antisubversive campaign has caused Uruguay's international reputation.

According to official statements, which U.S. Embassy officials say they believe are accurate, about 600 prisoners have been freed since the beginning of the year.

It is impossible to know how many of the remaining 1,800 prisoners have been charged, tried or sentenced. One major complaint by human rights groups has been that hundreds have been arrested, imprisoned without charges and then left there for years, a situation that now seems to be slowly improving.

At the same time, however, the army, which is in charge of what it calls the war against subversion, continues to arrest people even for expressing criticism of the government or for such things as having signed an anti-Vietnam war petition during the late 1960s. Life is still so strictly controlled by the military that Uruguayans must obtain official permission for any gathering of more than 20 people, including parties, weddings and funerals.

While few would argue that a country does not have the right to incarcerate terrorists, another major problem for human rights groups and the Carter administration is that most of Uruguay's political prisoners were not terrorists at all.

The overwhelming majority of those still held, probably more than 1,500 of the 1,800, are Communists and other leftists whose parties were legal - and who never joined the Tupamaros - before the military came to power in 1973. Some of these "communists," according to diplomatic sources, did nothing more than sell lottery tickets to raise money for the Frente Amplio, a leftist coalition that polled about 18 percent in Uruguay's last election, held in 1971.

In all, human rights groups such as Amnesty International and the Inter-American Human Rights Commission, which the Uruguayan government has steadfastly refused to permit into the country, estimate that 50,000 to 60,000 Uruguayans have been questioned or detained for political reasons since the military came to power.

But this year, according to diplomatic observers and some well-informed Uruguayans, the number of arrests has diminished, torture for interrogation purposes is said to have largely ended and prisoners held for years without charges or trial, like the Tupamaros sentenced last week, are being processed.

Once South America's most liberal and secure democracy, Uruguay now may be South America's most tightly controlled society. But "the margins of what is permissible," as one diplomat put it, are being expanded.

"It is our desire to return our country to its past values," said a diplomat with the rank of ambassador in the Foreign Ministry.

"We want to restore our past reputation as the Switzerland of South America."