Density altitude is the altitude at which an aircraft effectively performs according to air density. It does not necessarily match the aerodrome elevation: high temperature and low pressure reduce air density and increase density altitude.
Why it matters before take-off
With less dense air, engine, propeller and wing work in less favourable conditions. Take-off roll may increase and initial climb performance may reduce. Use this figure to understand the conditions, then consult the approved AFM/POH performance data for the aircraft.
A practical sequence
Read METAR and TAF, check QNH and temperature, calculate pressure altitude and density altitude, then compare the result with the applicable aircraft performance charts. Density altitude is a planning aid, not a take-off clearance.