Here's why:
* "Works Cited" is a title: It's the title of a section in your paper that lists the sources you used. Titles are typically capitalized only when they are at the beginning of a sentence or are the titles of complete works (like books, articles, etc.).
* Prepositions are generally lowercase: "In" is a preposition, and prepositions are lowercase unless they are the first word of a sentence.
Therefore, the correct way to write it is "Works Cited."