Keyword page density is a measure of your ratio of the word within the blog post or site page. So for instance, if you use your keyword five times per 100 words, that is a 1 percent keyword density. If your keyword density is not high enough, Google won't assign any notice to your site or pay attention to what you are saying. If your keyword density is too high, you will get penalized for keyword stuffing. And, you can back this up by checking what google webmaster has to say on the subject. Keyword stuffing can result in penalties to your site in search.
The ideal amount of keywords is 5-7%, though in practice, you can have up to 7-8% which will not likely have negative SEO consequences. Always consider user experience when keyword optimizing so as not to engage in keyword stuffing.