1. Why does it have to be a sentence; and
2. It is a sentence if it is a title.
Please free to criticise me on my use of the colon after the word "however". The only way I could have avoided it was to write: "However, I have the following observations", which is just too long. Please also feel free to criticise me on capitalisation of "Why" and "It".
Please feel free to criticise me on my use of the comma before the word "which" in the preceding paragraph.
Not at all. There are few titles that are full sentences; most titles are phrases, and even a single word can be a title. For example, Rebecca, Unforgiven, and Wicked are all titles (they are respectively a novel, a movie, and a play), but none of those are sentences.