Keyword density is the percentage of words on a web page that match a specified set of keywords.
in other words how many times do you mention "Shoes" in context of a particular page if you're a shoe site vs. someone who might be talking about the latest vans or converse? or "Shoeless" Joe Jackson?
Stacking is just another name for stuffing.
In the context of search engine optimization keyword density can be used as a factor in determining whether a web page is relevant to a specified keyword or keyword phrase. Due to the ease of managing keyword density, search engines usually implement other measures of relevancy to prevent unscrupulous webmasters from creating search spam through practices such as keyword stuffing.
Density/Proximity - how often, and where do the requested key words fall within the context of your page. If you have a good site, they will be higher density & proximity. I've heard 1.5% to 2.5% is ideal density for a keyword phrase.