Freeform roleplaying is very similar to LARPs, but different. Of course. A typical freeform, at least as it is run around here, is a one-session game, entirely self contained*, whereas a LARP goes on for many games.

But that's not all that helpful if you don't know what a LARP is, either. So. A Freeform game consists of some players, and some GMs. I say some GMs because the games normally run with about 25 players (though, really, any number of players can be involved, the smallest game I've seen was 12 player, the largest was 80), and 25 players means that at any given point, at least 5 will need help or judgement of some kind. Sessions are usually about 3 hours long, and run at gaming conventions.
At the beginning of the three hours, players are given character packs, which contain their character sheets, any items they might have, a list of other characters and their relationship to them, the rules of combat, and the events leading up to the start of the game.
The GMs will go over this briefly, ask if anyone has any questions, and when no-one does, give the beginning of the game spiel. Then they turn the players loose, and answer all the questions people suddenly remember they have.

The rules of freeforms vary from game to game - this can sometimes make them slightly confusing to play, if the rules are complex, but mostly the rules cover combat only, and social interaction is done as it would be expected to be, in character. This is, of course, not always true. Games that run with huge amounts of stats, where you need a GM just to look at another player (ie: vampire) can also make effective freeforms.

In general, because there is not a great deal of time to familiarise oneself with the characters and the world, they tend towards archetypes, well-known characters from the pop culture mythos, or entities most people involved are familiar with. This can lead to good role-playing, but it can also lead to people chafing in a character they just don't like for three hours, with no way out. Also due to this fact, there is less face-painting, cape-wearing, big-black-boots-and-lacy-shirt-sporting and angst in your average free-form. Which I think is a good thing, personally, but your mileage may vary.

* Exceptions being reasonably rare, but they do happen. Some games are run yearly at a certain con, for example, and build on the results of the author's favourite running the last time through.

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