What has happened is you have tried to download an app, could have been a while ago and there was an error whilst it was downloading. Therefore it never installed properly.
What happens is Itunes randomly tries to instal it, hence it asking for your password again. This has happened to me before, randomly, it happened to me after I had been roaming to another country, have you been abroad?
Could just be a co-incidence however. Nothing to worry about though, your not being hacked as London says
