I have recently purchased a game from the said company which is labeled as DRM: Free.
Like all Digital Distribution Systems, upon payment, I was given a link to download the game I bought.
What do you get for this purchase? A bootstrap program that acts as a download manager and online verification tool that needs to connect to the internet in order for the installation to proceed.
Now this wouldn't normally be a problem since most games purchased through Digital Distribution Channels are done this way. The problem is, the game is labeled as DRM Free. Why do you need to get connected to the internet if it's labeled DRM Free?
Before making a purchase, read all of the FAQS and guidelines.

Once the game is installed there is no DRM on the actual program, they just need verification for download and install. Sorta like Steam, except it doesn't need to be run while the game is running as well.

Yes. You have a point. But once you are tied to a certain system, it's not DRM Free.
DRM Free means, that I the owner :
a.) Can backup the game (True)
b.) Can install it on multiple machines without limitations (True)
c.) Does not need to go online (False)
They should have indicated that "Internet connection is required to install the a game". I am not a big fan of STEAM, but at least they've never claimed nor did they've ever labeled one of their games as being DRM Free.

Well don't know what to say, it's a type of online one-time serial check but with an installer instead. Write a complaint to them, I'm not protecting GG :)

Um... I don't like GG but for reasons other than this. I never even thought about it this way.

For most of the games they sell you will only ever need to be online ONCE to install as long as you do the following:
When the installation first starts, navigate to the numbered directory in the Gamersgate temp. directory and copy the setup.exe (or similar) file to anywhere else.
Either complete installation or quit out -- doesn't really matter which. And copy the exe back to the correct folder.
You can then install from that exe whenever you want, thus avoiding the need to authenticate ownership of your game.
There are a few games in which you cannot do this due to the installation process finishing the second the installation box appears (thus causing the unprotected exe file to be encrypted again before you can copy it.

Thanks. Your advice solved my dilemma. What I don't understand is why do they have to put their customers in such a predicament? Why don't they just give out a simple executable with no DRM like GOG does as advertised? It's because they want to have some form of control.

Perhaps their distribution system is simply set up that way? I wouldn't assume anything malicious.

lol.

It's simply so they can verify that you actually purchased the game.

You purchased from an online digital distribution store. I don't see what the issue is with being online to download it. Seriously now.
Just make sure you keep the download folder backed up and you'll have a DRM free game ever after.

The issue would be if GG went out of business and the servers weren't around anymore.
The types of DRM that games purchased online use should be more detailed (or hell even stated) but sadly are not likely under the excuse to "keep things simple" or just pure laziness.

Yes. That's correct. But the verification has already been done once you have logged on to your account. This small but important detail should be explained clearly. A customer may mistakenly download the files from another computer with internet access and bring the downloaded files to his home computer without internet access expecting that everything will work only to be dismayed by the fact that INTERNET ACCESS IS REQUIRED TO INSTALL THE GAMEYou'll to do it all over again.
They as distributors should label these small but important details carefully and responsibly.

Perhaps GG should rebrand such games as DRM: Reduced Sodium. Let's avoid misleading labels, please!

Except that anyone with an ounce of sense should read the 'Help & FAQ' section of any digital distribution site to find out how their system works, and then make an informed purchase. The GG downloader does not install any invasive software onto your system, you may make physical backups of the software, and patches for games bought at the store more often than not are the standard developer release.
As a system for games distribution it is incredibly non-invasive, much more so than the like of Impulse or Steam in my opinion. As for requiring an internet connection for one instant on the computer you are installing to, they are a digital distribution service: they probably judge that the vast majority of customers will be installing to the PC they browse the site with.
I am sorry that you feel a little misled about their system, OP, but I really think that compared to most it is pretty inoffensive.