Dogs do understand key words and phrases, also are very intuitive to people and surroundings. The only time I use leashes is to go to the vet or out in public. We live in a rural area on 7 acres with a pond. A few acres are fenced in and we have doggy door so our dog(s) can come and go, except at night. Your dog sounds like a smart, good boy.
Animals are a joy to have.