Why Cats Land On Their Feet
One of the major reasons is that the cat has a lot more vertebra than a human and so the cat is able to twist its back much more than any human could ever do. This has made it possible for the cat to twist itself immediately and right its position to be able to land on its feet. The backbones are also very flexible and this is another reason for the cat to be able to twist itself and correct its position. This ability of the cat to correct the position it is in to be able to land on its feet at all times is called as the righting reflex.
Another reason for the cat to be able to correct its position in mid air and land on its feet is that it has a well developed vestibular system. This is the one that identifies the position of the body and tries to correct the body position. This system identifies that the cat is not in a right position and allows the cat to right itself before the fall is completed.
Another important reason for the cat to fall on the feet and walk away unharmed is that the cats have a very small body when compared to many other animals. The cat is also quite light and so it is able to flatten itself when it is falling. When the cat flattens itself with the leg hanging down, it becomes like a parachute and so it is able to land lightly on its feet and this prevents injury to the cat during falls from great heights.
Though cats are able to land on their feet all the time, you should be careful with them as there are times when the cat is sick and it may not be having a quick reflex. This can make the cat to not be able to right itself leading to injury or even death.
Source: Cat Health site.