Keyword density is the percentage of times a keyword appears on a web page. Keyword density applies to the page as it displays live on your website. There is no hard and fast rule for what your keyword density should be. Many SEO experts consider the optimum keyword density to be 1 to 3 percent above which it can be considered as spamming.
Keyword density is a measure of the relative importance of a keyword on a given page, based on its rate of occurrence. It is one of the factors being considered by search engines in determining your website’s popularity or importance. And also, it is one of the bases for categorizing your website’s theme and in finding out which term the site is relevant to.
It is simple the occurrence of your keywords throughout your article...you have to keep a strict check for it as the search engines will use this to rank your page in a search query.
You can calculate it as:
occurrence of a keyword/total words in the article
keyword density is the ratio of the word that is being searched for the keyword to the total number of words appearing on your web page.By improving the density of keywords on your pages may also do the same for your site's search engine position.
Keyword density is the percentage of times a keyword or phrase appears on a web page compared to the total number of words on the page. In the context of search engine optimization keyword density can be used as a factor in determining whether a web page is relevant to a specified keyword or keyword phrase.
Keyword density is a combination of the number of times a keyword or a keyword phrase, in proportion with other words, appears on a Web page. The more times the keyword appears in relation to the total number of on page words, the greater the overall keyword density. The more times that other words appear, the lower the proportion of keywords, resulting in a lighter keyword density. If you want to more in details read this article of wikipedia:- http://en.wikipedia.org/wiki/Keyword_density