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Freiheit is situated in the valley of the Lerbach stream near the town Osterode am Harz. The old village began to develop near a castle which was founded in the 12th century to protect the ford across the river Söse and the route into the upper Harz region. The village did not subordinate to the jurisdiction of Osterode and therefore was a rival of the town. Osterode obtained several privileges from the Dukes of Braunschweig who also restricted the sale of certain goods in Freiheit (e.g. in 1474 and in 1577). During the 19th century textile industry became the major source of income for the village. In 1971 Freiheit was incorporated into the municipality of Osterode am Harz.