why pluto is not a planet?

The IAU (International Astronomical Union) terms a an object in a solar system as planet if it meets following 3 criteria:
1) The object must orbit around the Sun.
2) The object must have sufficient mass to assume hydrostatic equilibrium (a nearly round shape).
3) The object have cleared the neighborhood around its orbit.

Pluto meets the first 2 criteria but fails to meet the third. Hence, Pluto has been categorized as a dwarf planet.