Free universe (also "open" universe) is a free culture ("free as in freedom") fictional universe that serves as a basis/platform for creating art works such as stories in forms of books, movies or video games. Such a universe provides a consistent description of a fictional world which may include its history and lore, geography, characters, laws of physics, languages, themes and art directions, and possibly also assets such as concept art, maps, music, even ready-to-use 3D video game models etc. A free universe is essentially the same kind of framework which is provided by proprietary universes such as those of Start Wars or Pokemon, with the exception that free universe is free/"open", i.e. it comes with a free license and so allows anyone to use it in any way without needing explicit permission; i.e. anyone can set own stories in the universe, expand on it, fork it, use its characters etc. (possibly under conditions that don't break the rules of free culture). The best kind of free universe is a completely public domain one which imposes absolutely no conditions on its use. The act of creating fictional universes is called world building.
But if anyone is allowed to do anything with the universe and so possibly incompatible works may be created, then what is canon?! Well, anything you want -- it's the same as with proprietary universes, regardless of official canon there may be different groups of fans that disagree about what is canon and there may be works that contradict someone's canon, there is no issue here.
Existing free universes: existence of a serious project aiming purely for the creation of a free universe is unknown to us, however free universes may be spawned as a byproduct of other free works -- for example old public domain books of fiction, such as Flatland, or libre games such as FLARE, Anarch or FreeDink create a free universe. If you want to start a free universe project, go for it, it would be highly valued!
All content available under CC0 1.0 (public domain). Send comments and corrections to drummyfish at disroot dot org.