Does The Custom of the Country by Edith Wharton fit the definition of a novel of manners?

A "novel of manners" is a subset of the novel form, but it does not preclude a work from being a classic.  "If, as in the writings of Jane Austen, Edith Wharton, and John P. Marquand, a realistic novel focuses on the customs, conversation, and ways of thinking and valuing of the upper social class, it is often called a novel of manners. " (Abrams 200)

The Custom of the Country certainly falls within this definition.  Undine, who comes from a successful but essentially middle-class family from Apex City, Kansas, breaks into the highest social ranks of New York.  She even marries into one of the oldest and most respected families of Old New York society, the Marvels.  All this is allowed not because of Undine's goodness, the brilliance of her conversation, or the worth and likability of her parents; Undine makes it to the very pinnacle of New York society (and, later, the French aristocracy) solely because of her beauty.  What this says about the values and practices of the social upper crust of her time is one of the themes of the novel.

Wharton contrasts the Gilded Age social values of the late nineteenth-century New York with what would have been the values of an earlier time in that same place.  There are still some people in the novel, namely the rest of Undine's first husband's family, who remember a time when a parvenu like Undine might have been tolerated in society, but certainly not allowed to marry into one of its best families.  While Wharton does not necessarily say that it would be better if the old-fashioned social exclusion customs still existed, she does note that the lapse of them has created a vacuum in which an unscrupulous person, like Undine, could wreak havoc on a family causing a suicide, a divorce, the temporary abandonment of her son, and the concealment of another marriage and get away with all of it. 

There is little to recommend the character of Undine -- she is beautiful, but her selfishness is so pathological that she can subvert anyone else's desires -- including her young son's -- no matter how justified, to her own whims.  She is supported in this behavior, tacitly if not always actively, by her parents whose sole wish is to launch her into the highest level of society they can.  None of the men in her life ever call Undine to task on her behavior, and one of them even kills himself to spare her the inconvenience of divorce.  The man she married first, a marriage hidden by Undine's parents while Undine married two other men in succession, seems to hold her not responsible for the lives she has ruined, including his own.

This societal permission of bad behavior, by a beautiful woman who was just intelligent enough to understand how to keep the appearance, if not the practice, of virtue, is "the custom of the country" to which Wharton refers.  Since the action of the novel concerns members of the social elite, with very little of the classes below them, this is properly a "novel of manners" but since the voice of the author is critical of the society, this novel may also be considered satirical.

Source: Abrams, M. H. A Glossary of Literary Terms.  Boston: Thomson Wadsworth, 2005.