The Registration form web part is a ready-made web part that can be used right out of the box. You can just place it on any page of your website without setting any web part properties. However, if you want to modify the default behavior of the web part, you can set a number of properties. You can find a detailed description of these properties in the Kentico CMS Web Parts reference.
The password field in the form supports validation according to a password policy specified for the website and also calculates and displays the relative strength of the currently entered password. To learn more about how these security options can be configured, please see the Password management -> Password strength policy topic.