Why does the app says Not supported with this device?

The app is called GraffitiCity and I have an iPod touch 4th generation 16GB why did this happen is it only for iPhone 5/Ipod touch 5?

It's called incompatibility.

maybe the app

- needs to run on a later version of iOS, like iOS 6.

- the hardware on ipod touch 4th gen is outdated to run the app.

- yes it MAY be only for iphone 5/ipod touch 5

look up system requirements for that app. My thoughts are probably correct.