It's hand pixeled, you can be assured. Every pixel is set by hand. I simply like "smooth" pixel art and anti-alias is a vital part of that. I don't think I can remove any more colors without loosing some of the smoothnes.

 It wasn't been approved right away because it appears as though you have used "dirty tools" to make the image.  Those faint pixels around the spear shaft and the head (in a lot of parts, really) implies that you've used some techniques other than the standard "pick color, select pencil tool, click and apply."  If I had to guess I would say you used something like the "paintbrush tool" as you drew the image, and this affected areas you didn't intend to.  There are people here who could explain this much better than I could, but one of the problems with dirty tools is that they let the computer decide what color any given pixel should be.  That's not the computer's job - it's the artist's (you).

I think this guy is fine, by the way, and I like P&P games.  I think you could probably simplify the image by reducing it to about 12 or 13 colors.

Why isn't this approved yet? I know it isn't perfect, but there are many other pieces on this site which aren't either. I don't think I will do any more changes to it in near future either.

This has a lot of potential. I like details on the spear. The faces could probably use more detail though, or more clear definition of what's there. On the pants and a few other places you're using what's called "pillow shading" (scroll down for an example) which is something best avoided.

Try picking a distinct direction for the light to be coming from and then shade the clothing with the light just coming from that direction.