Because everything seems to be right in Kerela... it has a beautiful landscape and amazing backwater scenery, it is one of the healthiest and most literate state, it has one of the best educational systems in the country. But the prominent feature of this state which gives it this phrase is its natural beauty.
Your vote on this answer has already been received
1. According to Hindu mythology, Kerala was created by Lord Parasurama, an incarnation of Lord Vishnu by throwing his axe across the sea to create new land for his devotees to live peacefully. So, Kereala is God's own creation, hence it is called God's own country!
#2 Every nook and corner in Kerala you will see Hindu temples, Muslim mosques and Christian Churches; and unlike many other parts of India, people live happily without communal riots and great religiuos tolerance. Hence it is God's own country full of worship places!
#3 Nestled between the pristine waters of the Arabian sea on the west and the lush Western Ghat mountains on the east, its intense network of rivers and lagoons, thick forests, exotic wildlife, tranquil stretches of emerald backwaters and a long shoreline of serene beaches make it a traveler's paradise. God's own country! Paradire :)