Well, if you look at the simple definition of a wheel and axle machine, namely that it must have a wheel and axle, the pencil sharpener fits perfectly, particularly if the pencil sharpener is a non-mechanical one, just one you have to twist.  As such, the pencil of course acts as the axle and then the sharpener itself is the wheel as it goes around the pencil.  It gets a tad more complicated if you are looking at the mechanical version, but likely could still be explained into the definition if necessary.  The article referenced below has some other good examples of simple wheel and axle machines.