Michael Horowitz's article pointing out that Google probably knows many Wi-Fi network passwords
has generated a lot of buzz. The technical details are simple enough: Android devices default to backing up user settings across the Internet to Google servers, and the backup data contains the passwords of any wireless networks that the device has been recently connecting to. To solve this problem, users must disable this option to have settings backed up.
Keep in mind that even if you take the time to disable these settings on your Android devices, the passwords to networks you use will still be sent to Google if anyone else (just one person) doesn't bother to do the same on theirs. Concerned by lack of security here? ask Google to encrypt its Android network backups.
→ See also - Tips for Wireless Home Network Security