1. Ensure that you are using GNU Make
  -------------------------------------

    The FreeType build system  _exclusively_ works with GNU Make.  You
    will  not be  able to  compile the  library with  the instructions
    below using any other alternative (including BSD Make).

    Check that you have GNU make by running the command:

       make -v

    This should dump some text that begins with:

       GNU Make  <version number>
       Copyright (C) <year> Free Software Foundation Inc.

    Note that version  3.80 or higher is *required* or the  build will
    fail.

    It is also fine to have GNU Make under another name (e.g. 'gmake')
    if you use the GNUMAKE variable as described below.

    As  a  special exception,  'makepp'  can  also  be used  to  build
    FreeType 2.  See the file docs/MAKEPP for details.
[download]

Seeing as MacOS is derived from some BSD (right?), maybe you're using the BSD make you're warned against using.

I checked that before starting the install:

$ make -v
GNU Make 3.80
Copyright (C) 2002  Free Software Foundation, Inc.
This is free software; see the source for copying conditions.
There is NO warranty; not even for MERCHANTABILITY or FITNESS FOR A
PARTICULAR PURPOSE.
[download]

I don't know if this will help, but here is the configure script:

#!/bin/sh
#
# Copyright 2002, 2003, 2004, 2005, 2006, 2008, 2009 by
# David Turner, Robert Wilhelm, and Werner Lemberg.
#
# This file is part of the FreeType project, and may only be used, mod
+ified,
# and distributed under the terms of the FreeType project license,
# LICENSE.TXT.  By continuing to use, modify, or distribute this file 
+you
# indicate that you have read the license and understand and accept it
# fully.
#
#
# Call the `configure' script located in `builds/unix'.
#

rm -f config.mk builds/unix/unix-def.mk builds/unix/unix-cc.mk

if test "x$GNUMAKE" = x; then
  GNUMAKE=make
fi

if test -z "`$GNUMAKE -v 2>/dev/null | grep GNU`"; then
  if test -z "`$GNUMAKE -v 2>/dev/null | grep makepp`"; then
    echo "GNU make (>= 3.80) or makepp (>= 1.19) is required to build 
+FreeType2." >&2
    echo "Please try" >&2
    echo "  \`GNUMAKE=<GNU make command name> $0'." >&2
    echo "or >&2"
    echo "  \`GNUMAKE=\"makepp --norc-substitution\" $0'." >&2
    exit 1
  fi
fi

# Get `dirname' functionality.  This is taken and adapted from autocon
+f's
# m4sh.m4 (_AS_EXPR_PREPARE, AS_DIRNAME_EXPR, and AS_DIRNAME_SED).

if expr a : '\(a\)' >/dev/null 2>&1; then
  ft_expr=expr
else
  ft_expr=false
fi

ft2_dir=`(dirname "$0") 2>/dev/null                         ||
         $ft_expr X"$0" : 'X\(.*[^/]\)//*[^/][^/]*/*$' \| \
                  X"$0" : 'X\(//\)[^/]' \| \
                  X"$0" : 'X\(//\)$' \| \
                  X"$0" : 'X\(/\)' \| \
                  .     : '\(.\)' 2>/dev/null               ||
         echo X"$0" |
           sed '/^X\(.*[^/]\)\/\/*[^/][^/]*\/*$/{
                  s//\1/
                  q
                }
                /^X\(\/\/\)[^/].*/{
                  s//\1/
                  q
                }
                /^X\(\/\/\)$/{
                  s//\1/
                  q
                }
                /^X\(\/\).*/{
                  s//\1/
                  q
                }
                s/.*/./; q'`

abs_curr_dir=`pwd`
abs_ft2_dir=`cd "$ft2_dir" && pwd`

# `--srcdir=' option can override abs_ft2_dir

if test $# -gt 0; then
  for x in "$@"; do
    case x"$x" in
    x--srcdir=*)
      abs_ft2_dir=`echo $x | sed 's/^--srcdir=//'` ;;
    esac
  done
fi

# build a dummy Makefile if we are not building in the source tree

if test "$abs_curr_dir" != "$abs_ft2_dir"; then
  mkdir reference
  if test ! -r $abs_curr_dir/modules.cfg; then
    echo "Copying \`modules.cfg'"
    cp $abs_ft2_dir/modules.cfg $abs_curr_dir
  fi
  echo "Generating \`Makefile'"
  echo "TOP_DIR   := $abs_ft2_dir"               > Makefile
  echo "OBJ_DIR   := $abs_curr_dir"             >> Makefile
  echo "OBJ_BUILD := \$(OBJ_DIR)"               >> Makefile
  echo "DOC_DIR   := \$(OBJ_DIR)/reference"     >> Makefile
  echo "LIBTOOL   := \$(OBJ_DIR)/libtool"       >> Makefile
  echo "ifndef FT2DEMOS"                        >> Makefile
  echo "  include \$(TOP_DIR)/Makefile"         >> Makefile
  echo "else"                                   >> Makefile
  echo "  TOP_DIR_2 := \$(TOP_DIR)/../ft2demos" >> Makefile
  echo "  PROJECT   := freetype"                >> Makefile
  echo "  CONFIG_MK := \$(OBJ_DIR)/config.mk"   >> Makefile
  echo "  include \$(TOP_DIR_2)/Makefile"       >> Makefile
  echo "endif"                                  >> Makefile
fi

# call make

CFG=
# work around zsh bug which doesn't like `${1+"$@"}'
case $# in
0) ;;
*) for x in "$@"; do
     case x"$x" in
     x--srcdir=* ) CFG="$CFG '$x'/builds/unix" ;;
     *) CFG="$CFG '$x'" ;;
     esac
   done ;;
esac
CFG=$CFG $GNUMAKE setup unix

# eof
[download]

Maybe you could request some debugging info to narrow down on the issue. I would start with changing the configure script:

#!/bin/sh -x

...

CFG=$CFG $GNUMAKE -d setup unix
[download]

i.e., add the -x (to see what the shell executes) and -d (for make debug info). Better redirect the output, as - under normal circumstances - it'll be a few hundred kbytes...

http://www.freetype.org/developer.html#bugreport

Becasue of make: *** No rule to make target `setup'. Stop.

Not helpful at all.

http://www.linuxforums.org/forum/misc/8729-make-no-rule-make-target-install-stop.html