the maximum number of free accounts have been activated on this phone

That's not an error. It's a message that is informing you that you have exceeded the maximum number of free iCloud accounts that you can have on any one device. I believe that the limit is three per device. If you set up other free iCloud accounts or if your phone is second hand and others set up free iCloud accounts on it, there is nothing that you can do about it on that phone. Apple limits it to each specific device.

You can create another iCloud account on another iOS device or on a Mac and then use that account on the phone.

How to free of accounts

Create the new account on a mac or other iOS device and

then you will be able to use that new account on your iPhone.