Does the Google penalty impact only what Google thinks is an offending keyword, or an entire domain? I have one keyword that dropped 80 places, but the rest are the same. Thanks in advance for any insight.
See, you have the answer yourself. It is just one keyword in your case but the worst thing you can get is the site penalty!
Google can penalize a keyword because the keyword may offend law or is not permited to show. Google can penalize a domain beacuse the it offend the Google's rule.
It depends, if you keep building links to 1 page with 1 anchor, then most likely that page will be penalized and not the whole domain, but if you fix those errors, you can always remove the penalty.
i wonder what would happen to your serps if you changed just the Title and description on that page which had the dramatic drop, after google reindexed the page? the algo for that word may have changed dramactically or only for a few days or few weeks, and then could return to where it was before.....i suppose it could be a penalty for that just keyword (and i would wonder why)
The penalty was for just one keyword. I know it was a penalty, it coincided with a specific thing. However, as of today it is gone. Strange.
I got a site wide link on a site with a lot of pages (more pages then the number of back links I currently had by a factor of 10). I just ignored the penalty and kept working on my link building, though like recommended here I changed up my anchor text. My take on it is site wide links are dangerous things on large sites.