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Word count for keyword (can be the same keyword in different angles) divided by the total word count of article = keyword density. The higher number means that keyword was used more often than other words. Word count should be determined manually, through reading the given text and not counting how many times a specific term appears (like "and", "the", etc.). Dividing won't work if you're trying to find out keyword density on your own.
Keyword must appear multiple times word-to-word or into-word ("key" might not be an ideal keyword because it could mean "secret"). Also, take care what Google considers valuable to their ranking system - I found out keyword density for "Google ranking" is way lower than it should be, and keyword density for "google ranking" is much higher.
0% means that keyword was not used at all, which usually happens if you have 2 words - one being your keyword, other being either some article title or the name of media where the content has been published. Higher keyword densities are more valuable to Google's search engine because they see links between different parts of text more clearly due to multiple uses of keywords present throughout the text If every sentence starts with "and", then Google sees that as a vital part of your blog/article/whatever-this-is-supposed-to-be on topic. keyword density is presented in percentage - if a keyword appears in the article 50 times out of 100 possible, keyword density will be 50%
100%. This means that keyword was mentioned every single time it's possible. Every part of text links to others with keyword highlighting
It can't hurt When you use people's names or titles of media where the article has been published, this also contributes. Still, there are many articles written by average writers with 100%-keyword-density which don't rank higher than they deserve because Google seems to take into account *who* wrote the content and not just how often a specific keyword occurs Look at online Keyword Density Checker!
The article title is the most important contributor since it's used as a keyword in search engines. The headline is given more weight than the actual text of the article Be sure that you're using keywords at least twice (including keyword-named media) unless you have a very high keyword density already Make keywords appear early on - after the first two sentences, preferably before the first sentence. The Middle and end of the article should be reserved for positioning phrase which tells what your post/article/whatever-this-is-supposed-to-be is actually about
Article description can be ignored if you have keywords from the title or from the intro sentence . If you don't have those, use article description as the second keyword
Yes, keyword density can be negative if the keyword is not used enough. Google counts too little keyword presence as "bad" keyword density. When a keyword appears in the article only once or twice, it's better to write 2 different articles instead because Google will never see this article as relevant to the keyword
More information on Yahoo! Search Marketing's page - how to increase keyword density.
On-page SEO is essential, so try using free On page Keyword Checker!