If I am writing about "keyword density" and want to rank higher for this phrase "keyword density", I am going to repeat this phrase "keyword density" over and over again in my content on "keyword density" so that Google knows this content is about "keyword density". And that whenever someone searches for "keyword density", my content on "keyword density" gets ranked higher on SERP for "keyword density" key.
This previous stanza contains 68 words. Out of it, I have used my keyword "keyword density" 8 times.
So, the keyword density of this paragraph is 11.76% (8/68*100).
To answer your question, keyword density is simply about how many times a keyword is used in the body of your content.
Here's how it's mathematically recognized:
Generally, the keyword density of 2-5% is considered a good SEO practice.
(Courtesy: PrePostSEO)
Meaning, if you’re using more than 5 keywords in 100-word content, you're over-doing it. You’re keyword stuffing. And this may make your content spa and affect its ranking.
Like, the first paragraph of this answer, the keyword density is more than 11 percent. For search engines, other factors remaining constant, that would likely be spam content.
If you want to know the keyword density on your webpage, use this tool.
I hope this answers your question clearly! :)
(Courtesy: Fabric Brands)