When I see "Top Developer" in Google Play, what does that mean exactly?
That is decided by Google, more precisely by the Google Play Team.
Google today announced Editor's Choice for Android Market, aimed to help you find the best applications on the Android Market. Google's also going to begin awarding the "Top Developer Badge" to help show users who are the best, and most trustworthy apps. For consumers, it's a way to help find new apps. For developers, it's another way of promotion and to monetize.