"Free-range" is a bit of a nutty term, at least in its technical meaning as regulated by the USDA, which simply calls for chicken labelled "free-range" or "free-roaming" to be "allowed access to the outside."*
In short, while the term "free-range chicken" on a label may make you think of birds like those in this picture, just hanging out, possibly strutting around the barnyard, or hunting and pecking for seeds and grubs in a pasture, that's not always the case.
"Allowed access to the outside" can be interpreted generously or quite narrowly. Larger producers, unfortunately, have been known to follow only the letter of the law, not its spirit, and put open windows or small doors that lead to paved patches of ground at the ends of large, crowded hen houses that are from anyone's idyllic notion of farm life or the best possible life for a chicken. These chickens can then legally be labeled "free-range" even though their habitat is far from what anyone would consider all that free.
Importantly, there are many farmers who do, in fact, give lots of free range to their free-range chickens, whose chickens have real, meaningful access to the outdoors, and are even free to roam (usually within large, move-able enclosures) on real fields and actual pastures, hunting and pecking for extra food along the way. Many farmers even use hay bales or old farm equipment to create environments for the chickens to explore and exhibit natural behavior like roosting and climbing.
Some smaller farms give their chickens real freedom during the day to explore far and wide (chickens naturally want to roost and gather closely at night, so both their natural behavior and their protection from predators are being respected when they're put in a coop at night!). These chickens may even gather a significant amount of their food themselves.
These farms will often put the label "pastured," which has no legal or regulated meaning, on their chickens to differentiate them from less-free legal definition of free-range chickens.
If nothing else, free-range chicken are, at least, kept cage-free. So the label isn't meaningless, it can just be a bit misleading if you're imaging chickens roaming through pastures or bopping around the barnyard to their own tune.
If you're concerned with how the chicken you buy was raised, the best way to seek out local or regional farms that sell at certified farmers markets, at specialty stores or co-ops with humanely raised standards, or through CSA models. Some of these types of farms even host farm visits once a while so people can see just where their food comes from.
Learn more about different types of chicken and chicken labels here.
* From the USDA website: "Producers must demonstrate to the Agency that the poultry has been allowed access to the outside."