The first FIFA World Cup was held in Uruguay because of a series of factors:

1 - The birthplace of football, the United Kingdom, resigned and departed from FIFA due to multiple disagreements on how key issues about the sport were being handled by FIFA. Thus, they considered the British Home Championship as the real world title and hosting the first official World Cup tournament in the birthplace of football wasn’t a posibility back then.

2 - The European nations that bid to host the championship withdrew due to the unfavourable economic state of the vast majority of the western world after the Stock Market crash of 1929. This wasn’t a problem for Uruguay due to its nigh first world status and booming and prosperous economy at the time (Top 30ish countries on Earth).

3 - Uruguay was the de facto back to back world champion at the time, having won the Summer Olympic football tournaments in 1924 in Paris and 1928 in Amsterdam. Which in absence of a World Cup were the only official world titles in football and in fact where organized solely by FIFA upon the condition of being considered official world titles.

4 - It was the hundredth year of Uruguayan Independence and the sign of its first Constitution. Hence why the main venue (the largest ever built to date at the time as requested by FIFA) was called ‘‘Estadio Centenario’’.

5 - Uruguay offered to pay for the expenses of the trip and the residence of each and every single one of the European National Teams that would chose to compete in the World Cup hled in Montevideo.

6 - Some news outlets in the past have pointed out at the highly plausible fact that because this was the first event of its kind to be held (so nobody in their right mind would’ve predicted what the World Cup has become today) and because Uruguay had already been proven to be the superior force twice in a row and Argentina had proven to be just as strong in their first European trip to collect Olympic laurels, the nations of Europe didn’t take it too seriously at the end of it all.