One of iOS 7's new features is the iCloud Keychain. What this allows is for passwords and credit cards stored in AutoFill to be shared between iOS devices and Safari on Mavericks so that you can easily retrieve them without needing to type them in again. It is also engineered to protect your data through an additional security key and two-factor authentication. Here's how to set it up, use it, and protect yourself.
iCloud Keychain can be set up when setting up a new device, when updating to a new iOS version, or from the iCloud menu in Settings. When setting up for the first time you'll be asked if you want to enable iCloud Keychain and to create a security code. By creating a security code, this will store the data in iCloud; if you don't create one it will still allow for data to be shared between devices, but it will not be stored in iCloud and you will need to authenticate a new device from another device with iCloud Keychain enabled on it. Authenticating from another device requires putting in the password to the iCloud account and choosing "Allow" on the dialog that appears.
To save a password or credit card to iCloud Keychain, just log in to a site or use a credit card in Safari. A dialog will pop up asking if you wish to save to the iCloud Keychain. Now, when you try to use a saved login or credit card from another device, Safari can automatically fill it in no matter where it was originally saved from.
It's important while using iCloud Keychain to have a passcode of some sort on your device. This treats you physically using your device as secure, so make sure that there's a security mechanism in place to ensure that your device is being used only by yourself or someone you trust. Otherwise someone can easily get access to your passwords and credit cards just by having your unprotected device.
What the security code for iCloud Keychain does is make it simple to sign in to the iCloud Keychain from a new device without needing to log in on that other device. This is a separate code or password from your login passcode, though it can be the same.
By default iCloud Keychain will prompt for a four-digit security key, though it's possible to either have an advanced security key that can contain letters and numbers, and/or one that is randomly-generated for complexity. If you forget this key, then you can use a second device in order to approve it. It also provides security so that even if someone compromises your iCloud account and wants to set up iCloud Keychain, they still can't get into your data unless they know the second password or if they have another device of yours that they also know the password to.
If you disable iCloud Keychain on a device by disabling it from the iCloud Settings, you can prompt to save the AutoFill data locally or erase it.
Hopefully this demystifies this very useful feature!