In a satire, an author tries to point out things that are wrong with people or with institutions. The author does so through ridiculing the things that he thinks need to be corrected.
In this case, Swift is ridiculing various things, but most especially the political and religious disputes of his time. This can be seen in Gulliver's time in Lilliput.
Swift shows that he thinks religious disputes are silly, for example, by having Lilliputians fighting over which end of an egg to open. He ridicules politics by having positions of power won by whoever can be best at gymnastics.
So he is pointing out what he thinks are flaws in the system by ridiculing those flaws. That makes it a satire.