Why is the seventh scale degree called the leading tone?

The seventh scale degree is called the leading tone because it possesses a strong melodic tendency to "lead" toward the tonic, or keynote, of a scale. This pull exists primarily because the note is positioned only a half step away from the tonic.1

In the system of functional harmony, this note is a crucial component of the dominant chord (the chord built on the fifth note of the scale). Because the leading tone is a member of the dominant chord, it contributes to the chord's strong harmonic pull toward the tonic chord, helping to establish points of arrival and articulation known as cadences.1