Keyword density simply refers as the total percentage of a keyword and parse used on any webpage as compared to the total number of words used to that webpage. Keyword density is really very important for search engine ranking because it is used to determine that, webpage is relevant to that specific keyword.

That ^ is correct
Also, to determine keyword density, you have a lot of options, personally I prefer a tool called wordcounter, it's so easy to use and it helps me keep the density of the keywords to 1-2% (which is recommended).

Like I'm sure others have said, the keyword density refers to the amount of times a targeted word or phrase (keyword) shows up in text/content. As a rule of thumb most people recommend 1%-2% keyword density and nothing above 3%.

If the density is just right it will receive better treatment from google and other search engines. If it is too high, however, it may be penalized and will produce nothing until the content is optimized to correct parameters.

Hope this helped clarify things.

Well, I am sure you have got your answers if you have tried doing a little Googling, What is Keyword Density? , also effects of keyword density

See keyword density is used for to know how many percentage of keyword you entered in a content, In a Particular content keyword has been repeated more than 5 % then the google thought that they want to promote keywords so some part it will affect your rankings..

Complete nonsense that has nothing to do with ranking pages.

keyword density is the percentage of total number of keywords present on a webpage to the total number of keywords present on homepage.It is very important in seo.

Normally we use 2-3% keyword density for a web page to keep our website safe from Google panda update, because it seems like spam...

I don't see keyword density effecting a website anymore. Also, when you are writing an article, do not think that you have to use certain no. of keywords to rank higher.

SEO has changed a lot in the recent times, it's no more the way it used to be. Try to research and you will find so many of these terms are now obsolete (anybody remember pagerank!!!)

Keyword Density is real but it's a red herring. KD is the limit that the various engines put on how often a term can appear before it's considered spam. The number is purely arbitrary and asking what it is is to invite you to run right up against it. If I were to tell you it's 15% would you tweak your page to 14%? Ignore KD and definitely avoid intentionally "loading" a page with terms.

Read your own content. Do you sound like a used car salesman or an infomercial? Would you change the channel on your own content? If so, Google will likely feel the same. Write naturally. That is the first law of SEO content.