Zinc oxide (ZnO) is called amphoteric because it can react as both an acid and a base. When it reacts with a strong acid, it behaves like a base and neutralizes the acid to form a salt and water. On the other hand, when it reacts with a strong base, it behaves like an acid and neutralizes the base to form a salt and water. This property of zinc oxide makes it useful in a variety of industrial and chemical processes.