The unexpected reason behind Liberty Village’s name connects to the darker side of Toronto’s history. The Toronto Central Prison, in operation from around 1870 to 1915, was located at King and Strachan. This meant that the first steps into freedom for recently released prisoners were along Liberty Street, which, as the central thoroughfare, extended its name to the surrounding area and helped to separate it from the nearby Parkdale neighbourhood. The prison had a reputation for being a brutal place with severe punishments and dismal sanitation. Most of the prison buildings were demolished in the 1930s.
Source: The Culture Trip