What is freedom?

In the Church of Jesus Christ of Latter-day Saints freedom is often defined in terms of agency. Agency is the ability and privilege granted by God for an individual to choose and to act for himself or herself. Agency is a gift linked inextricably to the Atonement of Jesus Christ.
In the first place, God granted agency to man. As Adam and Eve exercised their agency to partake of the fruit of the tree of knowledge of good and evil, they faced the consequence of being cast out of the garden of Eden. As Adam and Eve then received the gospel by exercising faith in Christ, repenting of their sins, being baptized, and receiving the Holy Ghost, they were blessed with the joy and happiness that was promised to them on condition of their obedience. By choosing to follow Jesus Christ, they received great blessings.
Jesus did always the things that pleased his Father. After granting forgiveness to a woman accused of adultery, Jesus taught the people on the Mount of Olives about true freedom. Jesus taught: And ye shall ^aknow the ^btruth, and the ^ctruth shall make you ^dfree. (John 8:32 ) He also taught:  If the Son therefore shall make you ^afree, ye shall be free indeed. (John 8:36) For this teaching, the people were ready to stone him, just as they were ready to stone the woman whom Jesus forgave. 
Similarly, the apostle Paul taught the Corinthians that, "where the Spirit of the Lord is, there is liberty." (2 Cor. 3:17) The principle of agency issues from and is dependent upon the foundational doctrine of Christ, namely, the Atonement. In other words, the life, message, mission and sacrifice of Jesus Christ are what make the exercise of agency possible. Thus, in a very real sense, freedom is not free. It was granted as a gift, and redeemed by an infinite and eternal sacrifice.
In the premortal world, the sons and daughters of Heavenly Father convened in a great council. Heavenly Father presented his great plan of happiness, the plan of salvation, and Jesus Christ was chosen as our Savior. We shouted for joy (Job 38:7). But there was a war in heaven. Satan rebelled against Heavenly Father and Jesus Christ, seeking to destroy the agency of man (Moses 4:3). A third of the hosts of heaven followed Satan. They were cast down to the earth (D&C 29:36–37, Rev. 12:4, 7–9) to tempt and to try man.
Here we see the basic opposition between the Lord’s way and the way of the devil. Jesus Christ gave his life so that all could be free to choose, whereas Satan employed coercion and compulsion. Jesus Christ gave all glory to the Father, whereas Satan desired all glory for himself. Jesus Christ’s Atonement makes agency possible, whereas Satan’s lies inhibit agency.
Michael and his angels were victorious over Satan in the war in heaven (And they ^aovercame him by the blood of the Lamb, and by the word of their ^btestimony; and they loved not their lives unto the ^cdeath. Rev. 12:11). But the war continues (And the ^adragon was wroth with the woman, and went to make ^bwar with the remnant of her seed, which keep the commandments of God, and have the testimony of Jesus Christ. Rev. 12:17, see also http://www.lds.org/liahona/2007/06/an-unending-conflict-a-victory-assured?lang=eng&query=Hinckley+victory+assured). The victory will be won in the same way on earth that is was in heaven, namely, by being valiant in the testimony of Jesus, and by obeying all of God’s commandments.
From the example of Jesus Christ we learn that agency, the privilege and ability to choose, is expanded and augmented by obedience. Indeed, Jesus Christ submitted fully to the will of his Father and Heaven, and by so doing, marked the path to true freedom. Agency is precious. It was given as a gift, and purchased by the ultimate sacrifice. If a war was fought in heaven over this precious gift, is it any wonder that the same war continues today? The victory in heaven was won through Jesus Christ. That same victory will be won on earth through Jesus Christ.
The Spirit of the Lord creates the conditions that foster true freedom and liberty. Thus, the terms “freedom” and “liberty” are expressions of the principle of agency, which principle is dependent upon the Atonement of Jesus Christ. (see also, http://www.lds.org/general-conference/2010/10/agency-essential-to-the-plan-of-life?lang=eng&query=agency+%28name%3a%22Robert+D.+Hales%22%29)