Distribution (Dist.) indicates how frequently experts mention a topic related to the subject of your content, based on the analysis of thousands of pages of documents. It can also be used to determine if a topic is mentioned too frequently, potentially making its usage appear unnatural.
There is a suggested distribution for each topic that’s displayed in bands like this.
In Settings > Account, you can set whether to display banded values or exact distribution counts (the default) in applications. The color-coding remains the same either way.
To be clear, mentioning a term a specific number of times on a page (keyword density) will not improve your ranking. Instead, use it to guide your topical coverage.
Using bands as opposed to exact distributions helps guide writers in their discussion of the topic (based on how experts use it) without causing them to fixate on a specific number. That fixation typically causes one’s writing to be stilted and flow unnaturally.