Before I answer the question I want to respond to Christopher Daniel’s comment about All-In-One SEO versus Yoast SEO for WordPress. To my knowledge, only Yoast’s plugin makes it easy to establish Google Authorship.
Yoast’s SEO plugin also allows you to choose which archive and page types you want to appear in the XML sitemap. I don’t consider his plugin overwhelming in the least. I’m also not saying All In One is a bad choice. I just want more control over my WordPress installation without breaking things.
The Question: Should keywords be a single word or short phrase?
Original Question on Quora: https://www.quora.com/Should-keywords-be-a-single-word-or-short-phrase
The term “keyword” is deceptive. To SEOs a keyword is a single word OR a phrase used when performing a search. The answer to the question can only be determined after you’ve performed extensive keyword research.
Keyword Example: video games
If you choose a highly-competitive keyword you’ll be going against some pretty powerful pages.
Long-tail Keyword Example: super cheap video games
If you go too long tail you might rank for keywords that no one is searching for.
Your mission: find the keywords that 1) are related to your site’s topic, 2) have substantial local search volume, 3) are not overly-competitive and 4) that your competitors are not aggressively optimizing for.
Once you’ve started optimizing for the keywords you find, be vigilant! Track which keywords are giving you the most qualified traffic. In other words, find the terms that make you money and find more like them.
No sense in reinventing the wheel. Check out these helpful pages on keyword research:
Keyword Research Guide by SEOmoz
How to Update Your Keyword Research Process for 2013 & Beyond
NJ SEO Consultant Chris Countey A Digital Marketing Blog & Forum

Chris, thanks for raising a great point.
In general, the SERPs most people see reflect a query structured more like “video” + “games” than “video games.”
Changing the query to a phrase using quotes, ie “video games” tends to help shake things up a bit in the results.
Going long tail definitely has it’s advantages, since outside of the Title Tag you don’t really need to slap the whole phrase in there concurrently to trigger contextual matches and increase your on-page relevance.
For example “These video games are super cheap” is going to trigger matches for the phrase “super cheap video games” under the normal broad match search results.
Great points. You don’t necessarily need a unique page for each keyword phrase. In fact, it’s probably a bad idea if you can’t dedicate enough resource to fill those pages with quality content, putting you at risk for Panda.