android:capitalize not working

If you're targeting API Level 14 and above, you should use

android:textAllCaps="true"

Otherwise, you'll have to implement this behavior yourself.

capitalize is basically just a KeyListener that you can set in XML, so it only applies to text input by the user. As the documentation states (emphasis mine):

If set, specifies that this TextView has a textual input method and should automatically capitalize what the user types.

There is a related question on how to capitalize the first letter of every word in Java which has some helpful answers.

android:capitalize is now deprecated.

Instead of using android:capitalize="words", you should consider using android:inputType="textCapWords".

Depending on your needs, you can also use multiple values, such as android:inputType="textCapWords|textPersonName".