Learn Danish: Hvad er klokken?

In Danish, you do not ask "what time is it?" like in English. Instead, the standard phrase is to ask "what is the clock?" which is Hvad er klokken?.

What is the literal meaning of klokken here?

Klokken literally means "the clock". It is the definite form of the noun en klokke (a clock), where the -n added to the end means "the".

How do I start my reply when someone asks me Hvad er klokken?

You reply by echoing the question! To say "It is three o'clock," you simply say Klokken er tre (literally: "The clock is three").

Can I use this phrase to ask what time an event starts?

No, Hvad er klokken? is only used to ask what the time is right now. If you want to ask "At what time does something start?", you would use Hvornår (When) or Hvad tid (What time).