Freelancing refers to the process of offering your services for someone else on a per project basis. The best way to explain this is through an example.
Supposing you possess excellent writing skills. There are millions (and Im not exaggerating) of webmasters and internet marketers out there who are in need of fresh content and new products on a daily basis. Their demand for digitally written works is so great that even if they are blessed with just as much writing prowess, they wont have the time to come up with everything that they need. Hence, they resort to outsourcing.
And this is where you enter the picture.
As a freelancer offering your writing services for a fee, you could take in some projects they will give you. You will be paid per delivery, and once thats done, you could take in more clients for consistent earnings.
But freelancing is not only limited to writing, or ghostwriting as it is technically known. There are other services that you could offer, depending on the area of proficiency you possess. Here are more examples:
-> graphic creation and design
-> web creation and design
-> software development