Google wanted to prevent the scammers from scamming and so they introduced a new thing called LSI.
Semantics means meanings: SEO's and others get ranked high by the use of keywords and keyword density, so in order to prevent that google introduced LSI, which means google will look in for meanings of a particular word and if it finds more meanings related to that particular word, or keywords related to that particular keyword, then google understands that the page is more important than other pages.
 

Suppose take a keyword Interior Designers, If the density of Interior Designers is more in a page then it is considered to be a scam. If the page contains keywords related to Interior Designing like Furniture's,Cabins,Partitions,Flooring and others related to Interior Designing then google understands that the page has some value in it and there fore giving importance to that page.

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To put this in simple words, you have to think beyond keyword density during your site optimization task. If you are trying to rank for, say for example, construction company in india, besides having "construction company" keyword phrase in your content, you might as well use related terms such as, building contractors, building materials etc. "To build" and "to construct" have similar meanings, in other words they can be called synonyms in appropriate contexts. The idea here is to keep the content tight to the theme. Google realizes beyond your keyword density in its judgement towards awarding the site for relevant content. You can also keep this in mind during your offpage optimization process. Use various anchor texts related to the theme, and this adds to your overall effort.

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LSI - Latent Semantic Indexing:Its a very complex and smart method for filtering the search keywords and indexing the right pages. Google bot used it for identifying and indexing the right page in the search engine. LSI seems very easy to calculate but actually its having their own standards. It effects on your TITLE, Description , and the Page Content. Through LSI , google can identify that most relevant page to the keywords and also from the website. If you have 2 similler pages for simmiler stuffed content and the meta tags then you are panalised by the search engine. Jus look at this.
 
Latent - Complex method or Potentially existing but not presently evident or realized
Semantic - relating to meaning
Indexing - the process of listing
 

For Example -

Search keyword - best Fools

TITLE - The Fools can make it best
Description - there are some Fools that try to make it best.

Web Content - There was a village of some fools and they were trying to make future best. but how can they . They ARE fools. lol