Why is Shakespeare known as the bard?

A bard is a poet and minstrel. The Word is of Celtic origin. It was given as a title to Shakespeare: the "Bard of Avon" or the poet of Avon (after the Avon river which flows through his hometown Stratford on Avon). Shakespeare's reputation is so huge among English poets that he's often called just "the Bard", and unless you qualify it, that's what is meant nowadays when you use the Word.