Hello Saad,
Chain density refers to the blocks produced versus total slots. We see 432000 slots per epoch. There is a 5% block coefficient which implies there is a 5% chance a slot will get a block (on average we see one block every 20 seconds). So a 5% chain density implies near perfect block production from pools .
We recently lowered d to 0.8, so community pools are minting more blocks - the decreasing chain density reflects blocks not being minted that should be (community pools missing blocks as now w/ d = 0.8 they have more assigned slots).