Aside from it being a name of a state in Mexico, and aside the fantastically crafted meaning given ("island of the blue salamanders"), something caught my attention. The fact is that this word in particular is, obviously not even a Spanish word. It is the name of a state in a Spanish-speaking country, but it is not a Spanish word per se. You cannot speak about a "querétaro". The word is also of unknown or, at least, dubious etymology, but most probably a Purepecha name meaning, some claim, "place with crags" and this is the most probable, considering the topology of the place.
My point is, this is hardly a valid word for the vote. It is not more of a Spanish word as Oklahoma or Wyoming are English words, and I don't expect these wining the award in this language. Even names of spanish cities as Zaragoza or León have more claim to be regarded as a "Spanish word" than Querétaro or, by the same logic, Mexico or Nicaragua. At any rate it is a Purepecha name taken and adapted into the Spanish language, being the probable original name; K'erendarhu.
A very interesting flaw in judgement by the Institutions of the Spanish language.