What is the best free XLIFF editor? 

It depends on the job. For translating files on your own machine, Poedit or OmegaT; for translating in the browser, Matecat; for batch extraction and conversion, the Okapi Framework tools; for Apple projects, Xcode itself. XLIFF is plain XML, so any text editor works for a one-line fix.

• Poedit (Windows 10+, macOS 11+, Linux) is a free desktop editor; machine translation suggestions and WordPress sync are the paid Pro features. It has opened XLIFF 1.2 and 2.0 files since version 2.2 and XLIFF 2.1 since 3.3, shows source and target side by side, and displays placeholders visually instead of as raw XML.
• OmegaT (Windows, macOS, Linux) is a free, GPL-licensed translation memory tool. OmegaT 6.1 ships bilingual filters for XLIFF 1 and XLIFF 2.0, and the Okapi Filters Plugin adds more formats. Pick it when you also want translation memory matches across many files.
• Matecat is a free, open-source (LGPL) online CAT tool. It accepts .xlf, .xliff and .sdlxliff, offers translation memory and machine translation matches, and nothing has to be installed.
• The Okapi Framework is a free, open-source toolset rather than an editor. Rainbow (GUI) and Tikal (command line) extract any supported format to XLIFF and merge translations back, and CheckMate runs quality checks on bilingual files. Use it for scripting and bulk conversions.
• Xcode: Product > Export Localizations writes an .xcloc catalog per language with an XLIFF 1.2 file inside. Apple's documentation says you can hand the catalog to localizers or edit the XLIFF yourself; after Import Localizations you edit translations in the string catalog editor.
• When several people work on the same files, a TMS such as Localizely imports and exports XLIFF 1.2 and has a free plan.

What a real editor gives you over a text editor: it checks the file structure on load, protects inline elements such as <x/> and <g> so nobody deletes half a tag, shows source and target next to each other, and writes the state attribute for you. In a text editor all of that is on you, which is fine for one string and risky for a thousand. See the XLIFF file page for the elements you will meet inside.