From the Wikipedia page
The liberty originally consisted of the area inside the walls of the Tower and immediately outside it, including Tower Hill. The limits were set out in the sixteenth century.
In 1686 letters patent granted by James II added three further areas to the Liberties:
These extraparochial areas had come into the possession of the crown when the religious houses that formerly administered them were dissolved. They had subsequently been used for the storing of ordnance.
The liberties had an administration separate from the neighbouring county and city, headed by the Constable of the Tower of London, and appointed their own coroner, and had their own courthouse with general and quarter sessions and gaol. A force of constables was appointed for the area. The inhabitants had certain other privileges such as being able to claim any beast that fell from, and any swans under London Bridge.
From 1855 the area was administered by theWhitechapel District Board of Works, and it became part of the County of London in 1889. The liberty was abolished on 25 June 1894 following a petition by the justices of the peace of the County of London under the Liberties Act 1850. The area of the former liberty was included in the Metropolitan Borough of Stepney in 1900. It now forms part of the London Borough of Tower Hamlets.
See also Liberties of London