Depending on who you ask, the word of the year for 2018 is justice (Merriam-Webster), misinformation (dictionary.com), toxic (Oxford dictionaries), or single-use (Collins).
The Macquarie Dictionary and Australian Dictionary Centre haven't announced theirs yet, and the American Dialect Society, which started choosing a word of the year in the 1990s, well before any of those dictionaries, will vote in early January.
Those are based on some combination of what's been looked up most and what some group (large or small, expert or self-selected) thinks is most relevant and/or most useful. M-W.com also lists "top lookups," which seems to be based on spikes in queries: there may not have been a day on which "excelsior" was looked up more than any other word, but excelsior got a lot of attention after Stan Lee died. ("Respect" and "maverick" are on the 2018 list for similar reasons.) The ADS is specifically looking for new words or usages (so "singular they" and "because" followed directly by a reason rather than with a preposition have both been selected as their word of the year in the past).
The ADS has also been doing this long enough to have selected words of the decade for the 1990s and 2000s, a word of the (20th) century (jazz), and of the millennium (she). That's "she" as distinct from "hen" (the older word for plural "they," after which our ancestors started using "they" rather than "hen," (probably because it's easier to distinguish from "he"), and English-speakers have spent centuries, literally, disagreeing over whether "they" or "he" is the right word for one person of unknown gender.