Before Pluto was discovered, it was predicted. Astronomers had observed that massive objects can affect the orbits of its neighbors, and, after seeing deviations in the orbits of Uranus and Neptune, assumed something substantial existed beyond their orbits.
When Pluto was spotted, it was thought to be the predicted object and was identified as a ninth planet.
A few decades later, astronomers started discovering more and more objects around other stars and didn’t know whether to call them planets or not. There appeared to be a need to define what a planet means, and that led to what some people consider Pluto’s demotion to a dwarf planet.
The International Astronomical Union decided that full-sized planets must orbit the sun, have a round shape, and have cleared their orbits of other objects. Pluto fulfills the first two criteria, but not the third.

Pluto is called dwarf planet because it do not complete the definition of planet as we know that planet generally moves in their orbit .....but pluto is moving in others orbit also....