Hey Degracious,
DESITY BASED TRAFFIC CONTROL SYSYTEM is control the traffic based on density of trafic on particular road and operate by micro controller. You arrise question how can sense the density of traffic? Your answer is you should be done by IR sensor. Each IR sensor attach on each road and interface with micro controller.Traffic light (RED and GREEN) is interface with micro controller for each road. IR Sensor work on digital output. If traffic is sense by IR sensor, it gives logic 0 else remaining logic 1. This logic directly gives to controller. Based on logic 0(when traffic is sense by particular IR sensor) particular traffic light(red is ON and green is OFF) is ON and remaing signal is OFF(green is ON and red is OFF).Monitor the output of sensor continously and control the traffic light.
First decide on which controller you want to build project and learn the configuration and interfacing of peripherals. Also learn about C coding.