I love to freestyle dance, like the heel-toe and two steppin(not the contry line dance) but I can't loosen up and make them look as smooth as they could be.

Can anyone help me out

I would think that just spending more time doing it would help in order for you to loosen up some. You probably can't be dancing live with people every day in order to get more experience. However, maybe you could get some videos that you might be able to study and dance along with on your own. Just a thought.

Its just a matter of practise... you would loosen up one day... keep practising... and don't worry about people looking at you...