Free and bound variables are concepts in logic and semantics that distinguish between different types of variable usage in expressions. A free variable is one that is not quantified within a given context, meaning its value can vary freely without restrictions, while a bound variable is one that is quantified and thus has its value determined by a quantifier, typically within the scope of a logical formula or expression. Understanding these distinctions is crucial for interpreting logical statements and formalizing language within frameworks like Montague's intensional logic and lambda calculus.