Searchenginegenie.com

Keyword density:
A measure of the number of times keywords occur within a web page's text divided by the total number of words on a web page. Search engines have unique algorithms for calculating keyword density.

Keyword proximity:
Keyword proximity and the keyword density within your Website can make or break your search engine optimization efforts.Keyword proximity considerations should include the proximity of keyword or keyword phrases to other keyword occurrences within the page, as well as the top of the page. After all, the top of the page usually tells you what you are there to read about.

Key word density is the ratio of the number of times the word is used with respect of the number of words present in that page. Normally it should be 1 to 3 %.

Key word proximity is the closeness between the key words like web design company, website design company.Its better to have closer key words.

Keyword density is the ratio, how many time you use your targeted keywords in your website. Its limit is 3%-5%.
Keyword proximity is the closeness of your keywords means how many close you use your targeted keywords in your content.

Keyword Density:
Density, simply put, is the quantity of something per unit of measure. So keyword density is a measure of how many keywords are in a block of web text, generally expressed as a percentage. If I write a page of content with 100 words that a search engine would index, and the keyword of interest appears 8 times in this text, then the Keyword Density is 8%.
Keyword Proximity:
Proximity is the word that describes how close one object is to another in space, time or relationship. Therefore in search engine terms, keyword proximity is the relative distance between keywords in web pages.

Keyword density is calculated by using the number of keywords on the post. keyword density should be minimum 2-4%. keyword proximity is the combination of keyword density and prominence which defines the closeness of the keywords.