When a FreeBSD system is powered on, it goes through several boot stages to initialize the kernel. The BIOS performs initial checks and loads the master boot record (MBR) from the boot device. The MBR contains the boot0 stage which initializes partitions and loads the boot2 stage. Boot2 loads the loader stage, which loads and passes control to the kernel. The kernel then performs initialization like setting up memory mappings and starting essential processes and daemons.