Here essentially JS Mill is talking about liberty of an individual that coexist harmoniously with that of other. The only freedom which deserves to be recognised is of pursuing our own good in our own way, so long as we do not deprive others of theirs, or impede their efforts to obtain it.
Mill identifies three areas which constitute the appropriate region of individual liberty and it is very important to understand all three of it to understand what does the above mentioned statement actually means.
According to Mill the three appropriate region of individual liberty comprises, firstly, the inward domain of consciousness; demanding liberty of conscience in the most comprehensive sense; liberty of thought and feeling; absolute freedom of opinion and sentiment on all subjects, practical or speculative, scientific, moral, or theological. The liberty of expressing and publishing opinions may seem to fall under a different principle, since it belongs to that part of the conduct of an individual which concerns other people, but, being almost of as much importance as the liberty of thought itself, and resting in great part on the same reasons, is practically inseparable from it. Secondly, the principle requires liberty of tastes of pursuits; of framing the plan of our life to suit our own character; of doing as we like, subject to such consequences as may follow: without impediment from our fellow-creatures, so long as what we do does not harm them, even though they should think our conduct foolish, perverse, or wrong. Thirdly, from this liberty of each individual, follows the liberty, within the same limits, of combination among individuals; freedom to unite, for any purpose not involving harm to others: the persons combining being supposed to be of full age, and not forced or deceived
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