There are lots and lots of articles
out there regarding keywords and most of them will confuse you.
First off what is a keyword ?
A keyword, or phrase is your topic, be that information or product for sale. For example: on my working site, my two main keywords are Pagan art.
Now these two words are pretty generic, however, it is their use together, as a phrase that makes them valuable. They are hardly the only ones that relate, but they are the ones I use most, for the simple reason, that research shows me that they are the most common two words anyone looking for art work of the Pagan type plugs into an engine.
How are they used ?
Keywords are placed in two ways, in your meta tags and in the body text. This is the point of confusion for most of us. The tendency is, to put as many keywords, especially in your entry page meta tags, as possible that relate to the site as a whole.
This is commonplace and we have all done it, its also a mistake, unless those words are ON your entry page. Your entry page is just that, a door way, it is not the only room however, and just as you don't put your whole house worth of furniture in the foyer, so too with keywords on the front page.
Keyword stuffing, has lead to considerable abuse. Meaning people who put words in , that are not related to the site at all, to trick the engines into serving up their page, even if its not related to the words they used.
So now, because of such people, if you innocently overload the keyword tag with words that DO relate to your site, but are not on the page where the tag lives, you will be penalized, just as if you were trying to scam the engines.
Quality over quantity:
Over all, the number of letters etc. one can use for keyword tags, is about 1000. But in practical reality, anything much over 300 to 500 is ignored by the engines. So picking words that are relevant becomes very important. It is much better to use fewer, more relevant words, per page tag, than try to overload the tags with the top end of allowable content.
Remember, the engine has to wade through all that to get TO your content. If the tags themselves are too long, the shallow dip some engines make will mean your content itself may not be read and indexed properly.
If your page is too widely based, it's hard for the engine to consider relevant meaning . If you are trying to cover too many subjects at once, its hard for them to figure what you are about and therefore figure out where to serve up your page in response to a search engine question. As that is all keywords are, a question put to the engine, of which it tries to serve up the most relevant page it can find. It uses keywords on your page, to determine that relevance.
Remember, you have many pages, and those pages will be read and indexed. Let them be the focus for each topic/keyword, and leave the entry page for the general contents, but don't over load the entry page with ALL the keywords, unless you have a very tight focus for the site as a whole and can keep it under 500 letters.
The other pages can carry their own weight and provide the same relevance and will be served up by the engines as needed for content, if the keywords are accurate. Your site is not just your front door its the whole thing, and when it comes to keywords and the engines, you have to think of it as one whole unit.