What is it?
iCloud Keychain is Apple's built in password generator and manager. If you create a new account on a website you will often see when you get the password step the option for a long and complex auto generated secure password.
This is iCloud Keychain trying to help you out. Instead of using the same password that you have used for everything since 1998, it wants you to use a secure password that nobody could guess because it is randomly generated. The only problem with a password that nobody can guess is that you cannot remember it either, but that is ok because when ever you get the website Safari will just autofill the password for you.
This way you can have a different password for every website without having to try and remember them.
