Google webmaster guidelines > Design and Content guidelines > Guideline four of nine in this category states...
"Think about the words users would type to find your pages, and make sure that your site actually includes those words within it."
Definitions-
keywords - words that users would type to find your site in a search engine.
Examples and Explanations
This deceptively simple sounding guideline has two parts. Both parts have enormous impact on how people will find your website and how your website will rank in search engines.
First part - "Think of the words users will type to find your pages"
Think of words users would type to find your pages -
This is referring to what is commonly called "key words". It is important to think of them because an understanding of what words people use to find the information or services your website offers will also help you clearly and accurately describe your site.
How?
Well let's start with a simple example. It is very easy to know what words people will use to search for your services if you are a hotel in Chicago.
Most people who looking for a hotel in Chicago will use the words "Chicago" and "hotel". They might type into a search engine the phrase "Chicago hotels" or "hotels in Chicago" or "cheap hotel in Chicago" or "hotel near the airport in Chicago".
Each of those examples include the two words "hotel" and "Chicago". When the manager of a hotel in Chicago is thinking about "the words users will type to find" their hotel website, the words "Chicago" and "hotel" should be high on their list.
Second part - "make sure that your site actually includes those words within it"
The website of a hotel in Chicago should have the words "hotel" and Chicago" in it. This may seem like common sense, but businesses very often do not have important words on their websites.
Imagine that the hotel in Chicago prides itself on how hip and modern it is. To represent this "hipness" they create an ultra modern and minimalist home page that is very slick and streamlined. There is just a photo of their lobby and their clever looking logo. At the bottom of their home page it states - "The hip and cool place to stay downtown".
In the above example, there is no way whatsoever that a search engine would know that the webpage was describing a hotel in Chicago! A search for "chicago hotels" would not include that website in its results.
To ensure that website is found for search terms like "hotel" and Chicago" they must add those words to the site.
If they changed the text from - "The hip and cool place to stay downtown" to "The hip hotel of downtown Chicago" then it would improve it's rankings for the keywords "chicago" and "hotel".
Key Concept
The main way a search engine determines what a website is about is the words used within it.
How to determine if your website is following this guideline
To get an idea of what words a search engine is seeing to judge your site use our spider simulator which will show you not just the words of your website, but also the amount of times key words are used and their percentage of your page text. If you notice (using the Chicago hotel example) that you do not you "Chicago" and "hotel" many times on your page you may consider finding more opportunities to use those words. Instead of saying "our hotel is super" say "our hotel is the best in Chicago". It is important however that you keep the language of your website natural. There is no need to repeat the words over and over or to create a un-natural sounding paragraph.
Does the website use key words in the text?
If you sell shoes in Toledo are the words "shoes" and "Toledo" used on your site? Check, you might be surprised by what you find.
Check your keywords with our tool
Resources
From Google:
An article from Google employee on the Google webmaster central blog:
Better understanding of your site
An article from the Google help pages:
Why doesn't my site show up for a specific keyword?
Google key word tool to help you find words about your subject:
An interesting article about the importance of words in a website:
How does Google collect and rank results?
From other sources:
An article with suggestions about how to choose keywords for your site:
Keywords: are you missing the magic words for your web site?
A detailed look at how to choose and use your key words:
How to conduct your keyword research
Article describing in detail the importance of the words you use on your web pages:
Words - the secret sauce in website marketing
Another tool for helping you find search terms: