Polygon density refers to the relative size of polygons in a particular area of a mesh. Areas of high detail usually require a higher polygon density than areas of low detail. Examine the polygon density of the character model in the following screenshot:
As we can see, the character has a higher polygon density near the eyes, but a lower density on his belly.
Within any given area, polygons should all be approximately the same size as one another so as to avoid shading issues