Definition of Freeware

Freeware(from "free" and "software") is computer software that is available for use at no cost or for an optional fee. Though the definition of "freeware" covers both proprietary and closed source software that is available for use at no cost as well as free and open source software, in common usage it tends to refer more often to proprietary and closed source software that is available for use at no cost. Software that is commercial but not available free of charge is occasionally referred to as payware or commercial software.

Based on history

The term freeware was coined by Andrew Fluegelman when he wanted to sell a communications program named PC-Talk that he had created but for which he did not wish to use traditional methods of distribution because of their cost. Fluegelman actually distributed PC-Talk via a process now referred to as shareware. Current use of the term freeware does not necessarily match the original concept by Andrew Fluegelman.

Based on criteria

Software classified as freeware is either fully functional for an unlimited time with no cost, monetary or otherwise. Or partially functional, with a fully functional version available as commercial or shareware. Freeware can be proprietary software available at zero price. The author usually restricts one or more rights to copy, distribute, and make derivative works of the software. The software license may impose restrictions on the type of use including personal use, individual use, non-profit use, non-commercial use, academic use, commercial use or any combination of these. For instance, the license may be "free for personal, non-commercial use".

Accordingly, freeware may or may not be free and open source software and, in order to distinguish, the Free Software Foundation asks users to avoid calling free software as "freeware". The principal difference being that free software can be used, studied, and modified without restriction; free software embodies the concept of freedom to use, while freeware that of free-of-charge. Freeware is also different from shareware; the latter obliges the user to pay after some trial period or to gain additional functionality.

I took this article from Wikipedia, this is the link to get there Freeware.