The user will have 3 attempts to set the password

private int tentativasErradas = 0;

private void btnEntrar_Click(object sender, EventArgs e) {
    if (senha != "") {
        if (txtVerifica.Text == senha) {
            Form desenvolvimento = Application.OpenForms.OfType<Desenvolvimento>().Any() ? Application.OpenForms["Desenvolvimeto"] : new Desenvolvimento();
            desenvolvimento.Show();
            this.Hide();
       } else {
            if (tentativasErradas == 3) {
                MessageBox.Show("Três tentativas !");
                Application.Exit();
            } else {
                tentativasErradas++;
                MessageBox.Show("Senha inválida !");
            }
        }
    } else {
        MessageBox.Show("Cadastre uma senha !");
        txtSenha.Focus();
    }
}

The reason for "keeps going even if the password has been typed 3 times".

Whenever the user clicks on the button that generates the event btnEntrar_Click() , then on the first line, you pass erro = 0 , which makes it always the "first time". Even if the user is entering for the 100th time, the error will always be reset to 0. This is a failure on your part.

Remove this variable from the button event.

static int erro = 0;

And whenever the user misses the keyword increment.

Something like this.

class Program
{
    static int erro = 0;
    private void btnEntrar_Click(object sender, EventArgs e)
    {
        erro++;
        if(erro < 3)
        {
         //utilizador ainda não falhou 3 vezes
        }
        else
        {
         //utilizador falhou 3 vezes (ou mais)
        }
    }
}

As it turns out, the difference is that erro=0 is not being reset to 0 in the button event.

Every time you run the btnEntrar_Click(); function, the int erro=0; variable again receives a value of zero. Try declaring the variable in the body of your class as follows:

class Program
{
    static int erro;

    static void Main(string[] args)
    {
        Menu();
    }
}

Do not forget to increment the variable if your algorithm identifies an authentication error like this:

erro++;