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Most likely because you are trying to connect to a passworded server. On the server browser when a list of servers are showing. If you look to the left of the names of each server you will see a small icon with a padlock.
Green means it doesn't have a password and Red obviously means that it's passworded. Also if it's your server that you are trying to connect to that is giving you the wrong password error obviously check that you haven't enabled a password.
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