An exuse for the mangling of something where it no longer resembles the orignal piece that it was based on. Common in flim making and books when the author or director changes the story line, characters, setting etc. to try and draw in more viewers/readers. A derogative term in all senses.
West Side Story took artistic liberties with Romeo and Juliet, changing the characters and setting, but keeping the basic plot line. This is why no one likes West Side Story, has or hasn't heard of it.