You are looking for keywords that cover your content, Keywords that people will actually search for and keywords that indeed aren't too competitive. To give an example:
You've made a cute video of you cats playing. The keyword cats is extremely competitive. Lots of people will be searching for it, but there are also a millions videos already using this tag. So you need to define the tag more. Playing cats is more specific and will already have less competition. Black cats playing or Scottish Fold cats playing is even better. It describes your content more accurately, which means that if people are specifically looking for that content, your video is quite likely to pop up.
I hope this explains it a bit!