How we do calculate that this keyword is high competitive and this keyword is low competitive? For example we have a keyword "Application Development". How we conclude that the competition for "Application Development" is High or low? Please resolve this. I am very confused about this.
The only tool which will let you search for keyword ideas and show you the "difficulty" level is http://www.keywordrevealer.com - this tool uses it's own algorithm to calculate the competition for each keyword.
^^^ wrong. LongTail Pro is the best keyword search tool out there hands down. They have a keyword competitiveness tool that spits out a number 0-100 that relates to how competitive a keyword is to rank for. There are also other ways to determine how hard to rank such as using chrome extensions like SEOQuake and Mozbar. Another way is to scan the first page on the SERPs and look to see if micro niche sites are actually ranking for it or not. If you see page 1 dominated by authority sites then pick a different niche. But if you see niche sites ranking then that is a good indicator you could do the same. You still have to analyze things like their on-page and off-page SEO, but that's a good start.