"Liberal" as in "classical liberalism" for most of the 19th century meant somebody who believed in individual rights, private property, capitalism, and limited government (correct me if I actually am wrong about any of this). Yet for most of the 20th century in the US, "liberal " meant a greater emphasis on a strong role for the federal government, greater regulation of the economy, and generally left wing characteristics.
When did this shift in definitions occur?
Our idea of liberalism was developed in the 1700 century, primarily by John Locke. In his "Essay Concerning Human Understanding" he described his idea of men being born equal, a "tablula rasa" on which experience writes the individuality. The Essay came out shortly after the Glorious Revolution and represented the view of many British intellectuals. A political system that had the "Divine Right of Kings" as its foundation was no longer accepted and the philosophical idea of Liberalism found its political manifestation in a limitation of the power of the Government, ie the King.
The link of liberalism to private property was (much later) identified by Max Weber in the "The Protestant Ethic and the Spirit of Capitalism" to lie in the protestant faith (esp. in the form of Calvinism), which replaced institutionalized salvation by the catholic church with a personal salvation. Economic success was seen as a sign of blessing and since those British intellectuals, that developed this kind of thinking, belonged mostly to the commercial class, freedom of economic development was seen as the core of liberalism. For that reason, property had to be secured against access of the government. The consequence was, that they, who damned the inheritance of political power as unnatural, had no problem with the inheritance of economic power.
As the commercial class grew richer and more powerful, it became apparent, that "a State of perfect Freedom to order their Actions…as they think fit…without asking leave, or depending on the Will of any other Man", as Locke described Liberalism, was only really possible with inherited economic power. Governments on the other hand became more trustworthy and it could be "observed that arguments used against ‘government’ action, where the government is entirely or mainly in the hands of a ruling class or caste, exercising wisely or unwisely a paternal or grandmotherly authority — such arguments lose their force just in proportion as the government becomes more and more genuinely the government of the people by the people themselves" as David George Ritchie wrote.
The "New Liberalism" therefore weakened its stance on property rights in favor for more social justice which nowadays many liberals see as the foundation of a "State of perfect Freedom".
Sources: Russell "A History of Western Philosophy" and http://plato.stanford.edu/entries/liberalism