Royalty Free Music is a term that refers to production music that has no additional fees to pay once the music has been licensed. The license fee is paid one time and (depending on the license or company selling it) can be used in a project of yours either a single time or multiple times. Royalty free music licenses and the libraries that provide them are offered on a non-exclusive basis (in other words, they can license the song to you and anyone else on the planet at the same time).
Since there are no additional “royalty” payments to pay the licensor after initial licensing, it is therefore classed as “royalty free music”.
A “project” can be anything from a YouTube video, to a corporate presentation, to a film and more. Essentially, wherever music can be used to enhance a project, a license can be obtained for it.
In a traditional “rights managed” licensing structure, music licenses can be much more complicated and expensive. This is not to say that there is not a place for rights managed licensing however.
The benefit of rights managed music is typically (but not always) higher quality production values, choice of music from world famous artists and options for exclusivity. Royalty Free Music in comparison is simple, cheaper and more convenient.
On the down side of royalty free music, you cannot typically exclusively license a song, and securing a license for a major artist royalty free is extremely unlikely.