It's probably his way of enjoying the music physically. It likely keeps his other senses stimulated too. A lot of musicians do it, although not as much.
Edit:
Being blind his brain works different. The part of his brain that should have been used for sight is now being used for hearing. He has Very good hearing because of being blind. When sound waves from his voice or piano for instance, bounce off objects around him it let him see things with his ears. So just like bats Stevie Wonder has a sort of echo location ability. When he moves his head around it lets him triangulate the position sounds are coming from. Its as simple as that.
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