The term "free market" originally referred much more to freedom from government or ruler-controlled markets than it did to the behavior of actors with a market.

A free market in that sense is one in which (more or less) anyone can sell (more or less) anything at (more or less) any price. Historically, the freedom to do this was impeded by laws and/or arbitrary rule making, even if today monopolies, monopsonies and rent-seeking are a bigger problem in many markets.