The word "liberal," in the context of education, does not refer to politics but to the concept of personal freedom and the intellectual training of a free person. A liberal education focuses on the training of the mind rather than on the skills required to earn a living.
In his work "The Republic," Plato (429--347 BC) advocated a system of education beginning with physical training in the gymnasium and proceeding to arithmetic, geometry, astronomy and music before culminating in the study of philosophy. Plato conceived of education as a tool for acquiring culture rather than a mere gathering of random information.
The Romans borrowed and expanded on the ancient Greek concept, then passed it on to the early Christian writers on education such as St. Augustine, who began as a teacher of the liberal art of rhetoric.
The medieval Scholastics, or "schoolmen," of Paris and Bologna founded the first universities between 1100 and 1200 AD. The Scholastics taught the seven liberal arts of grammar, rhetoric (debate and persuasion), dialectic (or logic), arithmetic, geometry, astronomy and music. Medieval university students first learned the trivium (the first three liberal arts) and then advanced to the quadrivium (the final four). As the European university system developed and spread around the world, the seven liberal arts and the concept of a liberal education spread with them.
In the 1800s, many people felt that higher education should evolve in order to address a changing world affected by new discoveries in science and technology. The Yale Report of 1828, sponsored by Yale President Jeremiah Day, called for a broader curriculum but retained the general concept of a liberal education.
In the middle of that century, many American colleges and universities adopted the German model of a research university focused on training in specific topics. Traditional liberal arts college became a much smaller part of the educational landscape in the United States, although many such colleges still remain as of 2010.
According to the Yale Report of 1828, "Our object is not to teach what is peculiar to any one of the professions; but to lay the foundation which is common to them all." A liberal education will not give you a set of specific skills appropriate to a particular profession, but a broader intellectual training designed to prepare you for every aspect of life.