Population density indicates how crowded a place is by calculating the number of people per unit area of land. It is computed by dividing the total population of a region by its total land area. High population density areas may face challenges such as resource scarcity, unemployment, and pressure on infrastructure, while low-density areas may experience underutilization of resources. Population density helps policymakers in planning resource distribution, infrastructure development, and welfare schemes to ensure balanced regional growth and sustainable living conditions.