If you want to capitalize a whole word on the Nexus 7 keyboard, there are two way to do that: touching the shift button between every letter, and using caps lock feature. By default, caps lock is switched off.
How to turn on caps lock on the Nexus 7 keyboard
* Touch where you want to type to open onscreen keyboard.
* Double-tap or touch & hold the Shift key to enable "caps lock". To return to lowercase letter, touch the Shift key again.