keyword is a word or phrase, usually about one to four words, that represents what a site is about. When you use them correctly, web crawlers will be able to properly index your web page. Your site's success or failure hinges on how well you select and place keywords on the page.
At the top of the page in the head section, "meta tags" can be found. They will provide the crawlers with some idea of the contents of your page. A meta tag will only have a small amount of space (50-100 characters is about the max). Therefore, don't include articles like "a", "an", "the", conjunctions (and, but...), or other irrelevant words in keyword phrases. Whenever possible, use only nouns, verbs, adjectives, and maybe adverbs.
The Keyword Meta tag: Most meta tags are designed as a place to insert keywords and other information to index your site properly. People, however, abused this by "keyword stuffing" (inserting a lot of repetitive, irrelevant keywords into meta tags so a search spider would rank their site close to the top). Your site will be penalized for keyword stuffing as search engines have learned about this method. Rumor has it that Google no longer utilizes keyword meta tags. It doesn't hurt for you to have a good keyword meta tag, just in case, especially since Google is just one of many search engines.
The Title Tag: should contain keywords. A "bot" (search engine crawler or "spider") places a lot of weight on keywords that are placed into the title. Just like the other meta tags, the title tag should be found/ placed in the head section. Be brief; leave the keywords near the front, and maintain a natural language. Just like the keyword tag, don't attempt to artificially cram keywords into your title.
Description Tags: Place a description tag in the head section of your web page. Include appropriate keywords in your description, but maintain good but concise grammar and simple language structure.
The H1 and H2 tags: Search engine spiders put special importance on these. These are not in the head section. they are used in the body of the text to delineate main themes. (Like titles, but not to be confused with the title tag.)
Comments in Images: Images cannot be seen by spiders, but the "alt" text that is placed in the image tag can be seen by them. This is an excellent space to insert keywords.
The Body of the Page: Lastly, the page should make sense. You want your keywords, H1 tags, H2 tags, description tags, and the text body to be applicable and in harmony. The most important keywords should be featured in the first two-thirds of the content. Keep in mind that if your keywords are stuffed in artificially, even in the basic content of the page, your page rank may suffer as well as your reputation.
Resource Taken From: http://ezinearticles.com