It’s capitalized in English for two primary reason: religious reverence, and tradition, but grammatically, there’s really no requirement to capitalize it.
The earliest Greek manuscripts were written in all uncials or majuscular letters, without any intervening spaces between letters.
For example, the following is John 1:1 as written in the Codex Sinaiticus:
The Hebrew language, both ancient and modern, also lacked miniscular letters.
In reality, the word “God” (with majuscular “G”) is shorthand for “the god.” The equivalent of “the god” (as well as “God”) in Greek is ὁ θεός.
Dr. Dale B. Martin wrote,1
People—even scholars—tend too quickly to forget that “god” in ancient Greek was not a proper name. This is easier to remember when we read the texts in Greek because they so often use the word θεός (“god”) wuth the definite article ὁ (“the”). When reading Greek, it is easier to read ὁ θεός as “the god” rather than “God.” Unfortunately, using God without the article makes it easier to take it mistakenly in English as a name, a tendency made even more tempting by the fact that it is almost always capitalized when referring to the god of Christianity. It would actually be better for an orthodox understanding of the nature of the Christian deity to leave it uncapitalized and with the article. Perhaps we should say “the god” when speaking of the Christian deity, just as we speak of “the” holy spirit.
The translators who produced the King James Version arbitraily translated ὁ θεός into English, sometimes as “the God”2 and other times as “God.”3 There are even some occasions where they translated as it as “the god.”4 But again, how did they know when to translate it as “the God” versus “God” versus “the god”? They couldn’t decide this from the Greek, as the original manuscripts lacked the distinction made possible by the combination of majusculars and minisculars.
It is understandably a matter of reverence for people who esteem the one true god to capitalize the first letter of a word that refers only to Him. This is also the case with the word “lord,” as in, “the Lord Jesus Christ.” It is also the case with pronouns used in reference to God, like the word “Him” above, and as you will often encounter in the Bible.
You wouldn’t be wrong if, every time you read ὁ θεός in the Greek NT, you translated it into English as “the god” as opposed to “God” or “the God.” The Jewish authors of the New Testament understood that there was only one true god by nature. So, whenever they read ὁ θεός, they would customarily think of him, i.e. Yahveh. However, there are many who are called ὁ θεός or “the god” on account of their office, such as human judges.5
The one true god only has one name, יהוה, referred to as the Tetragrammaton. The word “God” is technically not a proper noun (a name), but a common noun. “God” (or “the god” or “the God”) refers to what יהוה is.
Referring to the tradition of writing “G*d” or “G-d” instead of “God,” Dr. Martin also wrote,6
The substitution of these different spellings and symbols for “God” is even more seriously misleading, as I hinted above, because it actually implies that “God” is God’s proper name, in the same way that YHWH functions as the name of the God of Israel in the Hebrew Bible.
Consider the analogy:
name:nature :: Joe:human :: Yahveh:god
There is a slight disparity, as Joe is one among many humans, while Yahveh is the only true god. But, you understand the function of the word “god” now, as a common noun (a thing), rather than a proper noun (a name). That being said, because there is only one who is ὁ θεός by nature, i.e. Yahveh, the word θεός could sometimes function as a quasi-name, although it would be difficult to discern where this phenomenon occurs on account of the arbitrary nature of English translations.
Martin, Dale B. Biblical Truths: The Meaning of Scripture in the Twenty-first Century. New Haven: Yale UP, 2017.
1 p. 150
2 cp. Rom. 15:5
3 cp. Rom. 14:20
4 cp. 2 Cor. 4:4
5 Exo. 22:9