This is one of my favourite all-time novels, so well done for studying it! You have asked a very important question, as obviously the title that an author gives to their work is a very important decision to make, and clearly it must link in somehow with the overall theme or message of the book.
One place to start would be looking at Chapter Eleven, which itself bears the same title as the title of this great book. One of the things that is described in this section is the coming together of Ammu and Velutha:
Who was he, the one-armed man? Who could he have been? The God of Loss? The God of Small Things? The God of Goose Bumps and Sudden Smiles? Of Sourmetal Smells - like steel bus-rails and the smell of the bus conductor's hands from holding them?
Considering this quote, as the series of rhetorical questions thinks about the identity of Velutha, we can apply the title of "The God of Small Things" to his character. However, of course, the significance of this title is much wider and bigger than merely representing his character.
One stylistic aspect of the novel is the way in which Roy uses flashbacks and two separate time frames, jumping between the twins now and the twins then, in their childhood. However, the novel ends with one critical moment, describing the two lovers who have broken all of the Love Rules together, sharing a moment of happiness. Pay attention to what Roy says about the focus of Ammu and Velutha in the final chapter:
Even later, on the thirteen nights that followed this one, instinctively they stuck to the Small Things. The Big Things ever lurked inside. They knew that there was nowhere for them to go. They had nothing. No future. So they stuck to the small things.
Therefore we can say that Roy chose to give this novel the title it bears because the God of Small Things somehow represents the determination and stubbornness to make the most of a situation and enjoy it for its pleasures no matter how fleeting those joys may be. Ammu and Velutha instinctively realise that they are fighting a losing battle. So much goes against them as they break the "Love Laws" of caste and race. They instinctively accept the tragic fact that "they had nothing" and "nowhere to go," and so deliberately limit their thinking to the "small things" that enable them to enjoy their love until the inevitable happens. Arundhati Roy presents us with the operation of "big things" such as caste and race and how people become the victims of such concepts. "The God of Small Things" therefore celebrates the lives of such victims, lamenting their unjust end, and recognising that against such big forces, it is perhaps only the "small things" that we can build our lives around.