Buying a sim free IPhone 5s?

What exactly is a sim free iPhone? Does that mean I can't call/text and use mobile data? Or is it where I can't physically use it as in turning it on by pressing the sleep button? My sister is confusing me and I need a bit of clarification. I'm thinking it's just the first one because it makes no sense if I bought a phone from Apple that won't even turn on.

Every iPhone 5S requires a SIM card.

A SIM free iPhone is exactly as it sounds. An iPhone without a SIM included.

Yes it would mean you can't call/text/data since there's no SIM to do it with. Usually you buy it like that if you already have a SIM to put in & use.

My last 3 iPhones were bought that way.