Why is Gulliver's Travels a satire?
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.
Gulliver's entire adventure is a series of satirical treatments of various human conditions. Swift agreed with the somewhat prevalent (in Europe and England) view of man as fallen due to original sin. There are any number of sections of the book where he points out the flaws in the human character, perhaps most scathingly on the island with the Yahoos and their absolute inability to do anything but delve deeper into vice and sin.
Swift also satirized political events of the day, using the Lilliputian governer as an example of the most horrible kind of ruler, petty and misguided and seeking only to increase their own image and power at the expense of everyone but their cronies.