“Free software” is a matter of liberty, not price. To understand the concept, you should think of “free” as in “free speech,” not as in “free drink.”
Free software is a matter of the users' freedom to run, copy, distribute, study, change and improve the software. More precisely, it means that the program's users have the four essential freedoms:
- The freedom to run the program, for any purpose (freedom 0).
- The freedom to study how the program works, and change it to make it do what you wish (freedom 1). Access to the source code is a precondition for this.
- The freedom to redistribute copies so you can help your neighbor (freedom 2).
- The freedom to distribute copies of your modified versions to others (freedom 3). By doing this you can give the whole community a chance to benefit from your changes. Access to the source code is a precondition for this.
A program is free software if users have all of these freedoms. Thus, you should be free to redistribute copies, either with or without modifications, either gratis or charging a fee for distribution, to anyone anywhere. Being free to do these things means (among other things) that you do not have to ask or pay for permission to do so.
You should also have the freedom to make modifications and use them privately in your own work or play, without even mentioning that they exist. If you do publish your changes, you should not be required to notify anyone in particular, or in any particular way.
The freedom to run the program means the freedom for any kind of person or organization to use it on any kind of computer system, for any kind of overall job and purpose, without being required to communicate about it with the developer or any other specific entity. In this freedom, it is the user's purpose that matters, not the developer's purpose; you as a user are free to run the program for your purposes, and if you distribute it to someone else, she is then free to run it for her purposes, but you are not entitled to impose your purposes on her.
The freedom to redistribute copies must include binary or executable forms of the program, as well as source code, for both modified and unmodified versions. (Distributing programs in runnable form is necessary for conveniently installable free operating systems.) It is OK if there is no way to produce a binary or executable form for a certain program (since some languages don't support that feature), but you must have the freedom to redistribute such forms should you find or develop a way to make them.
In order for freedoms 1 and 3 (the freedom to make changes and the freedom to publish improved versions) to be meaningful, you must have access to the source code of the program. Therefore, accessibility of source code is a necessary condition for free software. Obfuscated “source code” is not real source code and does not count as source code.
Freedom 1 includes the freedom to use your changed version in place of the original. If the program is delivered in a product designed to run someone else's modified versions but refuse to run yours — a practice known as “tivoization” or (through blacklisting) as “secure boot” — freedom 1 becomes a theoretical fiction rather than a practical freedom. This is not sufficient. In other words, these binaries are not free software even if the source code they are compiled from is free.
One important way to modify a program is by merging in available free subroutines and modules. If the program's license says that you cannot merge in a suitably licensed existing module — for instance, if it requires you to be the copyright holder of any code you add — then the license is too restrictive to qualify as free.
For more go to http://www.gnu.org/philosophy/free-sw.html