I agree people should use the word "capitalism" more sparingly.  However it's not because most people mean "free market" when they use the term. 

Rather it's because some people mean "free market", whatever that means.  Some mean "the dominance of economy and society by mechanistic usury".  Some mean "democracy", whatever that means.  Some mean "American style police state tyranny".  And some mean "the actually-existing socioeconomic system in America today". 

The profusion of definitions in use, and the sometimes fuzzy boundaries between them, make the word "capitalism" not very useful for communication without a lot of context.