Keyword density is a part of the search engine algorithm. If you are trying to optimize a page for a specific keyword, not using it in any headers, text, titles will hurt your ranking for your keyword.
On the other hand, using a specific keyword too many times will also hurt your ranking with search engines. Keyword stuffing is/was a well known black hat SEO practice and is still in use today up to a point. I admit, i sometimes stuff keywords into a text after it has been written to get the desired effect. But you do need to make sure it fits in naturally and does not disturb the flow of the text you are optimizing. It might take a while, but if you are doing it (instead of your content creator), than do it right!
But keyword stuffing is basically a disproportional, unnatural percentage of keyword density, meaning you have used your keyword too many times or unnaturally.
But what is the optimum keyword density?
Well, most SEO specialists will say from 3-4 percent, although some even state 7%.
What is your ideal keyword density?
Why i do not care about the optimum keyword density
I agree with Matt Cutts on this issue, please do not tag me as a fanboy! I do not emphasize keyword density because of its diminishing returns to the search engine algorithm.
Lets see what MC has to say on the issue:
I do use my keywords in titles, headings, text. But i never go as far as checking the keyword density. I have written a ton of SEO posts and i think i gauge the numbers well enough. But keyword density is not as big of a factor for me as the backlink anchor text. If you ever heard of the saying that 20% of SEO is onsite, 80% is offsite, you may feel the same way. Although onsite is important, promotion is what gets you the traffic.