I think you should not treat this as a penalty, most probably this is a ranking fluctuation, I think it'll come back within few weeks of time.

May be its possible that you loss all your quality backlinks.

Originally Posted by John peterr

My website got penalized and it slipped from #5 to #55 in Google search engine position.

But, this happened only for one keyword in specific.

Should I treat this as a penalty or not?
If it is a penalty, does penalty limit only to a specific keyword?

Google did not penelize your website as you lost search engine position. It could be happened due to backlinks, may be they become dead. Check the recent change which you made to your website. It could be due the fact that may be you get backlink from some bad reputation website.

So try to check the backlinks of your website, i think there will be a problem with your backlinks...

Originally Posted by logoonlinepros

May be its possible that you loss all your quality backlinks.

Might be, I think too.