How in the H-e-double hockey sticks did it get nominated?? Were there any other worthy songs that were looked over?
The competition that year was probably very weak.
The year that "A World That Never Was" got nominated, the only serious competition was Streisand's "Evergreen," which won, and "Gonna Fly Now" from ROCKY.
You're right when you say that, back in the day, the old guard in the Music Branch of the Academy often nominated their "friends," but you still had to had a good song. Webster and Fain wrote many songs over the years that were NOT nominated.
And, unless you had the #1 hit, you also had to mount a good campaign with trade ads, sending records to everybody in the Music Branch, and so forth.