Total Words is simply a count of the total number words in a given area, not including HTML tags. Some engines may rank pages more favorably based on whether they have a certain number of words on the page.
Some engines prefer more words than other engines, but in general a total word count between 300 and 800 words is normally recommended in the <BODY> area of your web page. You should use this space in the body of your document as an opportunity to create excellent content for your visitors. Here are a few good articles and provide some good tips on how to create great content: