Yes, you understood it correctly.
"Liberty" means freedom.
"Strong-arm" is to use force. To make somebody do something. To bully somebody.
"Power" in this case is probably referring to a government or dictatorship.
In politics, Libertarians believe in individual freedom and liberty. The other political parties (communists, socialists, democrats, republicans) believe in the use of force over liberty (strong-arming people).