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I believe this is a result of a cross breed between the Penguin and Panda updates. The Panda updates gave a lift to all authority sites and the Penguin update penalized all sites that were involved in shady SEO. The end result is a few trusted authority sites who are worthy of occupying the first few pages of search results. You can try posting on the Google Webmaster forum and see if you can illicit a response from someone at Google. I should note that Matt Cutts kept saying for years, that host crowding in the SERPS was terrible but just recently backtracked and said that it can be good for users at times. More importantly, try to figure out in which area you can become an authority and clean up all your back links. 2007 - Cutts against Host Crowding - http://www.mattcutts.com/blog/subdomains-and-subdirectories/ 2012 - Cutts in favor of Host Crowding - http://www.youtube.com/watch?v=AGpEdyIcZcU

Don't create a page per key term please. Only create pages per intention. In your case, does the page you want to rank [plus sized clothing "xxxx"] match the intent of the searcher for that term? And is the same page as relevant for [plus sized clothing]. Are you the best answer for both terms? Is that page the best answer for both terms? I don't want to sound negative but I highly doubt that. If you sell plus sized clothing on the national level, your homepage is probably the best page. If you are going for new styles in 2012, that should be a different page with just those styles. If you are a store or collection of stores in Boston, then [Boston plus sized clothing] is more your term. Now after all of that, do know that typically using a broader term in addition to some modifiers is perfectly fine if it makes sense for the page. Don't take that too far, don't key word stuff your title tags or content. Know your keywords, use them, but don't abuse them. Talk to people, don't market to them.

Guest posts/articles wouldn't generally be considered paid, but they can create problems if they're obviously low quality or if you're spinning the same articles across dozens of sites. It really depends on a lot of factors: (1) How much you use this tactic. No single tactic like this, especially if low-quality, should be the bulk of your link-building. Diversity is very important ("natural" link profiles tend to be diverse). (2) If the sites are part of a link network. There's been a big crackdown lately on networks, and many article marketing services use them. If you're buying into a network or service, it's a lot more likely. If you're finding places to guest post manually, it's probably not a big risk. (3) If the post/articles are clearly spammy. Use your judgment - if you look at the blogs your articles are posted on, and there are 20 other articles all on unrelated topics in spammy verticals (mortgages or pay-day loans, for example), it's going to be easy for Google to spot your quality issues. You may not get penalized, but the links will be devalued.

I am very thank full to you all for your value able comments. We are going to redesign our website to make it more clean, focused and with the community development platforms like member area, blogs etc. We will also motivate the visitors to generate content that may not only help the other visitors but also increase the percentage of unique content on our site. We have also made some changes(in our current site) to decrease the duplicate content.  Again Thanks for your input.

Let me try the Alan advice for this issue and I will update the board. Thanks Devin your detailed answer, it will help me to handle other low quality pages.