Free software means the users have the freedom to run, copy, distribute, study, change and improve the software. 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 beer'.
GNU is an operating system which is 100% free software. It was launched in 1983 by Richard Stallman (rms) and has been developed by many people working together for the sake of freedom of all software users to control their computing. Technically, GNU is generally like Unix. But unlike Unix, GNU gives its users freedom.
The GNU system contains all of the official GNU software packages (which are listed below), and also includes non-GNU free software, notably TeX and the X Window System. Also, the GNU system is not a single static set of programs; users and distributors may select different packages according to their needs and desires. The result is still a variant of the GNU system.