I was very excited with the Google Now features that the Nexus 7 allows. However, I found that my Nexus 7 would not respond to me when I say "Google" like it is supposed to. I ignored this problem but today, I decided I had to find out how this can be fixed and this is what I found.
Apparently, the ability to trigger a search or action by saying "Google" is called hotword detection. To turn it off or on, start from the Google Now screen and touch Menu > Settings > Voice > Hotword detection.
EDIT: Actually, hotword detection was already on for my device. The problem was that when you set your English language to any other than US English (Australian English or UK English), Google won't recognise the "Google" command! Of course, because it is an American but who knew that would be a problem!