I think the original definition originated sometime in the 19th century, probably from Marx, and it meant the actual, real world system (this is different from communism, which designated an ideal).
I always understood it as an economic system based on two characteristics:
1. Private ownership of capital.
2. Labor as a market commodity.
I think these two aptly describe both 19th century and current economic systems, and I don't think this implies anything about symbiosis (or lack of thereof) between government and business.
Addendum: Maybe you mean free market, which, in my view, is a different thing. At least because it, like communism, describes an ideal, not an factually existing system (I am not aware of sufficiently closed economic system which could be considered to be a free market).