When it comes to free range parenting, the key is balance. Yes, it is important for your child to test himself against his environment. However, that environment needs to be both age-appropriate and safe. Children also need supervision and they may venture out further if they can turn back and know that there is a significant caretaker nearby.
The importance of creative play.
Creative play is both important and beneficial in child development. By knowing what stage your child is in, you can affect that stage through age-appropriate stimulation. For example, I suggest creating a print-rich environment to help stimulate your child's development: fill your home with books, magazines, colors, and word art. Also, allow your young child to experience freeform creative play with objects to manipulate, observe, listen to, and touch -- such as blocks, wooden spoons, balls, play. Be certain, however, that you've created a safe environment in which you can keep a close eye. None of these modalities need to be purchased or acquired, as you likely have the tools you need for creative play already in your home.
The importance of bonding.
Moreover, throughout my own research, I've learned that bonding is the most significant requirement for a happy, healthy child. If you bond well with your child, you can lower stress and anxiety, support security, and help your child reach his full capacity -- a poorly bonded child may be stressed and therefore over-produce cortisol (1), which can change both brain architecture and impulse control... forever.
But a word of caution: if you are a free-range parent, know that your child will not have the same sense of danger or threats as you do as an adult. Knowing your child's stage of emotional development is important, because young children, even through adolescence, can have inflated ideas of their own omnipotence and power with an unrealistic understanding or sense of danger (2).
In the final analysis, whatever the goals are for your child -- whether you subscribe to a free range, traditional, helicopter parenting style, or other -- the most important elements for your child are: bonding, security, safety, age-appropriate communication, and environment.
At the end of the day, extreme parenting is out of balance and therefore can cause emotional, intellectual, security, and safety problems. Moreover, it is important to remember that children are children, and even though we want to teach them maturity by allowing them to test themselves against their environment, we have to take into account their stage of brain development, including their understanding of danger. Parents are entitled to parent, and must parent wisely.
Source 1: Handbook of Early Childhood Education, Robert C. Pianta
Source 2: "Oh Yes I Can.""Oh No You Can't": Children and Parents' Understandings of Kids' Competence to Negotiate Public Space Safely, by Gill Valentine, Vol 29, Issue 1