Yes, Google can place a penalty on just one keyword or group of keywords, or just one page. People here report it and Matt Cutts has also mentioned it at times. When another page is linking to your site, Google may be penalizing or ignoring just that link, or that whole page, or that whole site. They use very fine-tuned control, depending on the situation.

Yes I can confirm this. Have been battling with a keyword penalty for 5 months now and cannot get it out. Seems they place them in about page 11 -13. I have backtracked all links and cleaned up any that looked suspicious. But still nothing.

Planning on submitting a recon request to see if this keyword comes out of this penalty but it might not be of use since Matt Cutts confirmed that recons only work for manual penalization. And I doubt that a keyword penalty is placed manually.

Is a keyword penalty the same thing as an over Optimization Penalty (OOP)?

also, would the best way to avoid incurring a keywrod penalty to be avoiding using that keyword in anchor text in inbound links? (Or not linking to a page that is optimized for that keyword, but instead linking to the home page?)