I think a starting point is whether the competition attracts most of the top players. That alone can't be enough, or a lot of pro events could all be world championships (for players to hold the title for about a week!)
When John Roberts Junior used to bypass the billiards championship, I guess I would still consider the championship event to be what it claimed. Even if you know the 'champion' isn't the top player. But if the top two or three or four players skip it, you've got bigger problems.
Actually, I think that happened for a while in billiards too, but the history of earlier years where all the top players participated helped paper over the lean times.
When you're judging between two different events that make a credible claim, I guess it gets much harder to split them. I try to cling to objectivity as much as possible, but the postmodern perception-based way of thinking forces its way in eventually
On the other hand, since tournaments don't necessarily go to the best player, perhaps the real world champion should be decided on longer-term performance. In which case you're into cumulative results, fargo rates, or votes based on judgement (like the original World Series of Poker)...
Anyway, I'm happy for Kakuto to be the 1977 World Rotation champion!