why is pluto called a dwarf planet?

It is classed as a dwarf planet, because that classification was introduced after the discovery of Eris.

A dwarf planet orbits a central star, has enough mass to pull itself into spheroidal shape, but hasn't cleared its orbit of "planetesimals". Pluto fits this definition, therefore it is classed as a dwarf planet.
 
Recently representatives from Space programs around the world as well as astronomy academics met in a rather heated counsel to attempt to define or redefine the way we view our universe. The old definitions came about with older information. By the definitions laid out Pluto doesn't qualify as a true planet. Mostly because it isn't the larges object in its orbit path but there were other qualifications that it didn't meet as well. People have always learned the planets as 9 planets that include Pluto so they wouldn't just strip Pluto of planet status completely so they have tried out Planetoid, and a few other terms and finally classified Pluto as a Dwarf planet. Though they are considering a few asteroids and other objects that seem to qualify as a planet by the new definitions. They are hoping to one day gather more information on Pluto though currently Saturn and Jupiter are the ones we are finding the most out about as our long distance projects are just now reaching them in the last few years. As we gather more information expect to see more and more specialized classifications for planets in our solar system.
 
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