Free range chickens are those which are allowed to roam about freely for food rather than being caged. This helps in muscle development of the meat.
It helps prevent cannibalism and it has been found that eggs from pastured hens have higher omega-3 fatty acid and vitamin A and E.
It means that the bird is not confined to cages and sheds. They have access to outdoors. Which doesn't necessarily mean that the bird has roamed across fields and grassy lands. For all you know the poor creature was given a small fenced up area to roam in.
Having said that, to ensure that the birds have adequate space, producers will have to keep fewer birds in the same area and therefore to maintain profits, they are priced at a higher rate. These are considered nutritionally superior to regular chickens.