Why is keyword Density important?

Search engines try to determine the content of your site by the words and phrases that appear across your pages. Phrases and words that are unique to your site are called ‘Keywords’ (or ‘Keyphrases’). If your keyword density is too low, then search engines might miss your product or service when indexing your site. If your keyword density is too high, search engines might penalize your site for ‘keyword spamming’.
Keywords density should not be more than 6-8%