Password length in AIX depends on the password encryption algorithm configurable via pwd_algorithm stanza in /etc/security/login.cfg. The default algorithm is "crypt" with the limitation of 8 characters. The algorithm can be changed to one of the new Loadable Password Algorithms (LPA) from /etc/security/pwdalg.cfg to give you a max password length of 256:
How to change:
# chsec -f /etc/security/login.cfg -s usw -a pwd_algorithm=ssha512
You may edit the files, but the easiest method to change LPA is:
# smit "sys_pwd"
Change the user's password:
# passwd mehdi <-- I set this password: "Thisisanewlongpassword:)"
If you are curious, have a look at /etc/security/passwd:
# grep -p mehdi /etc/security/passwd
lastupdate = 1304314271