Why is The Odyssey considered an epic poem?

There are many definitions of what an epic poem is. However, all poets and academics agree that the Odyssey is one of the classic examples of epic poetry.

To be classed as an epic, a poem must be long. But how long?
often book length, but there's no set length for which a poem goes from non-epic to epic.

Does an epic need form?
No, but they are often in verse form. As long as they are a narrative. Think of epic poems as a way to pass on historical events, in an entertaining, oral, fashion.
Both the Illiad and the Odyssey are in dactylic hexameter, but this is not a requirement of epics. However, it is the usual form of Greek and Latin epic poetry.

Elements often included in epics:
superhuman deeds, heroic adventures. Illustrative language - remember the first audience for epics were listeners, rather than readers.

How have epics changed?
Lord Byron and Alexander Pope both wrote epics, but utilised them for comic effect. Twentieth century poets rekindled interest in the long form, but the work of (e.g.) Charles Olsen and Frank Standford is usually described as a 're-envisioning' of the epic style.

The Odyssey is an epic poem because of the following:

• it is a long, narrative poem
• it focuses on an epic subject: the suffering of Odysseus
• it champions an epic hero, Odysseus,
• it characterizes the values and ideals of the Greeks
• it is passes on orally from a bard, or scop to a live audience over many sittings
• it contains elements of mythology and the supernatural, but its focus is primarily on humans
• it begins in medias res: "in the middle of the action"
• it chronicles many years and settings
• begins with an invocation of a muse
• uses formal, lengthy monologues

The term epic refers to a long narrative about a hero or god. In this situation the narrative actually takes the shape of epic poetry because it is written in meter.

One regularly comparable epic today is the Star Wars series. However, being in screenplay format, it differs in that it is not a poem.

Odysseus is the hero for whom the epic poem was written to celebrate. The poem is about his adventures from the point at which he finished the Trojan War until he is completely united with his wife.

Why is The Odyssey considered an epic? What is an epic?

The Odyssey is considered to be an epic poem because it focuses on the adventures (and misadventures) of a single man, a hero who has both brains and brawn (though some epic heroes had more strength than intellect), and who travels far and wide on a particular quest (for Odysseus, it is to reach his home). The poem does begin, as epics do, with an invocation of the Muse:

Sing to me of the man, Muse, the man of twists and turns
driven time and again off course, once he had plundered
the hallowed heights of Troy. . . .
Launch out on his story. Muse, daughter of Zeus,
start from where you will—sing for our time too.

This is sort of like a prayer that the poet (or the person speaking the poem aloud) would use to call upon the Muse of epic poetry, named Calliope, in order to enlist her aid in telling the story well. Muses were associated with inspiration, so the speaker essentially asks to be inspired to do a good job, for the Muse to speak through him.

Epic poems are also characterized by the use of epithets, descriptive words or phrases that precede character names or place names in order to emphasize certain qualities; they can also help with the meter of the poem. Athena is often "grey-eyed" Athena; Penelope, Odysseus's wife, is often "heedful" Penelope; Telemachus, Odysseus's son, is often "princely" Telemachus or "heedful" Telemachus or even "cool-headed" Telemachus; Zeus is "Olympian" Zeus; the sea is the "wine-dark" sea, and so on.

Epic similes are another common feature of epic poems, and The Odyssey has a number of these. In the Cyclops's cave, Odysseus and his men prepare to blind the monster. He says,

So we seized our stake with its fiery tip
and bored it round and round in the giant's eye
. . . and the broiling eyeball burst—
its crackling roots blazed
and hissed—
as a blacksmith plunges a glowing ax or adze
in an ice-cold bath and the metal screeches steam
and its temper hardens—that's the iron's strength—
so the eye of the Cyclops sizzled round that stake!

Here, Odysseus compares the sizzling of the monster's one eyeball, when they plunge the fire-hot wooden stake into it, to a blacksmith plunging fire-hot iron into the water to cool it. Both evidently produce the same steam as well as the same "screech[ing]" sound (though, for the Cyclops, it's because he is screaming). These epic similes are rather grand comparisons that are so descriptive and detailed that they are quite easily visualized by the reader.

An epic is a long poem that has several characteristics:

• a hero or heroes who embody the values of the society
• usually begins with an invocation to a Muse
• gods/goddesses who intervene on behalf of the humans
• a vast setting so the hero can go on adventures to foreign lands
• long and formal speeches
• use of epithets

These are most of the main characteristics of an epic. The Odyssey meets these requirements since it includes the hero Odysseus who tries to get home from the Trojan War. In doing so, he finds himself in strange lands and facing horrible enemies, such as Cyclopes and the Sirens. 

Why is The Odyssey considered an epic?

Homer's The Odyssey is considered to be an epic poem because of its length and its narrative structure. It tells a story about Odysseus, an extraordinary person, who seems to embody qualities—like bravery, misfortune, pride, and cunning—which are beyond the typical human man. Further, he goes on strange adventures, some of which are humorous and others which are tragic, and he encounters all kinds of external enemies and dangers. Odysseus meets with mortal antagonists who attack his men by night; he meets with cannibal giants who do not scruple to dash a man's brains out and eat him whole; he meets with a catastrophically huge whirlpool that threatens to swallow him up and drown him, as well as a six-headed sea monster than gobbles up half a dozen of his men; he survives being the lover of two immortal women, the wrath of Poseidon, and even his wife's new suitors, who vie for her hand in marriage and are happy to think he is dead. In addition, the poem describes Odysseus's dealings with the gods. For all of these reasons, and more, we consider this text to be an epic poem.