Data densification is a broad term that indicates that missing values or records are "filled in". Sometimes, specific terms such as domain padding (filling in missing dates or bin values) or domain completion (filling in missing intersections or dimensional values) are used to specify the type of densification, but here, we'll simply use the term data densification.
Data with missing values (such as data that doesn't have a record for every single date or only contains records for products that have been ordered, as opposed to all products in inventory) is referred to as sparse data.
Understanding when Tableau uses data densification and how you can turn it on or turn it off is important as you move toward mastering Tableau. There will be times that Tableau will engage data densification when you don't want it and you'll need to...