Type O blood is called the universal donor because:
It has neither A nor B surface antigens on the red blood cells. Antigens are proteins that are capable of evoking an allergic response in someone whose whole body does not have the antigens
This means that our immune system will not react to the blood because there is no antigen to react against.
O blood group can be transfused in people of any blood type; hence, the term universal blood donor.