Why do we need the "event" keyword while defining events?

Field-like events and public fields of delegate types look similar, but are actually very different.

An event is fundamentally like a property - it's a pair of add/remove methods (instead of the get/set of a property). When you declare a field-like event (i.e. one where you don't specify the add/remove bits yourself) a public event is created, and a private backing field. This lets you raise the event privately, but allow public subscription. With a public delegate field, anyone can remove other people's event handlers, raise the event themselves, etc - it's an encapsulation disaster.

For more on events (and delegates) read my article on this topic. (At some point I need to update this for C# 4, which changes field-like events very slightly. The gist of it is still correct though.)

It's partly needed because if you omit the event keyword, it breaks encapsulation. If it's just a public multicast delegate, anyone can invoke it, set it to null or tamper with it. If a class called MailNotifier exists and it has an event called MailReceived, it makes no sense for other types to be able to fire that event via calling mailNotifier.MailReceived();

On the other hand, you can only meddle with and invoke 'field like' events from the type that defined it.

If you wanted to keep your event invocation private, there's nothing to stop you doing something like this:

public class MyClassWithNonFieldLikeEvent
{
   private CustomEventHandler m_delegate;

   public void Subscribe(CustomEventHandler handler) 
   {
      m_delegate += handler;        
   }

   public void Unsubscribe(CustomEventHandler handler)
   {          
      m_delegate -= handler;
   }

   private void DoSomethingThatRaisesEvent()
   {
      m_delegate.Invoke(...);
   }       
}

... but that's a whole load of code just to (more or less) do what field-like events already give us.

The other answers are fine; I'd just like to add something else to think about.

Your question is "why do we need events when we have fields of delegate type?" I would extend that question: why do you need methods, properties, events, instance constructors or finalizers if you have fields of delegate type? Why do you need anything other than fields that contain values and delegates in a type? Why not just say

class C
{
    private int z;
    public readonly Func<int, int> M = (int x)=>{ return x+z; }
    // ... and so on
}

?

You don't need methods, properties or events. We give you that stuff because the method, property and event design patterns are important and useful, and deserve to have a standard, documented, clear way to implement them in the language.

The event keyword does 3 different things:

1. You can define an event in an interface, even though you cannot define regular fields in interfaces.
2. It changes the visibility of the = and () operators (assignment and invocation) to private, so that only the containing class can invoke the event or override all the methods contained in it. The -= and += operators can still be invoked on an event from outside the class defining it (they get the access modifier you wrote next to the event).
3. You can also override the way -= and += behave on events.