This algorithm change penalizes low quality sites that target a particular search phrase. I'm sure you've seen a lot of these, which often occur in spam laden niches. They'll just be pushed well down the rankings for those particular words.
I don't think that this means you shouldn't put any keywords in your domain name. One or two is fine. It just means that you shouldn't put all your eggs in one basket, so to speak. If you had your heart set on your domain name alone drawing constant traffic then you're going to be disappointed.
The best policy is to be mindful of SEO aspects such as keyword selection when building a website, but you shouldn't worry too much about it. The main thing is to keep adding unique, relevant information that will be useful to visitors.