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You're setting up a false assumption. It is a few forum posters who want to use the word 'free' as they want to. The rest of the world uses the word 'free' as we do. See the list above, which includes Google.
I'd say that if you can play without paying money, you can play for free. The option to buy other things is just that: an option. It doesn't affect one's ability to play for free. It may affect one's ability to be competitive, or it may not if the game in question allows one to simply invest time instead of money to be competitive. In any case, the issue of competition is not relevant to free or not free and MUDs are not inherently competitive things. They are for some people. They aren't for some people.
--matt
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