Since when does AKC have the right to declare what is and isn't a "real breed"?

Seriously, why do people think a breed of dog has to be recognized by AKC or UKC to be a "real" breed, and that anything that isn't is automatically a mutt? Last I checked, the definition of a 'breed' is "A type or bloodline of animal that has been consistently bred for specific traits by humans over time." So, am I wrong? Does the dictionary actually demand club recognition for something to be a "real breed"? If not, where did this ridiculous idea come from?