Why is he so scared?
The hard possibility: he's waffling, and he's using the parents as an excuse. The fact that he moved "a state and a half" for you is a good sign, but it's not definitive. You're completely within your rights to call him on this. And you should.
Something along the lines of, "Hey, it's okay. If you think we're rushing, if you're having second thoughts, if you have cold feet, you can tell me and I'm not going to be pissed. It's more important to me that you be honest than it is that you make me feel better." (Even if you're going to be pissed, tell him you won't be pissed.) Once you have this State of the Union, and assuming that he's passionately committed and that the delay has nothing to do with you, then...
How do we break it to them? (his family)
He's frickin' getting married. If this isn't an appropriate time to have a Big Boy conversation with his parents, we don't know when is. Specifically, though, there are a few things he can do to soften the blow:
- Tell his father how much the father's respect, advice, and support means to him.
- Anticipate his father's concerns by telling him that he has thought through all the consequences: he's thought through expenses, the lifetime commitment, how the two of you will raise a family, etc. (Aside: have you? That stuff's important.)
- Ask his father's "blessing," not "approval." This clarifies things. He still wants his father's buy-in, but the marriage doesn't hinge upon it.
- Underscore how well he knows you. He should talk not just about how "in love" he is--this is the kind of fuzzy and teenage language that will make his father lose his shit--but how, in the limited time you've been together, he truly knows and understands you.
Am I being too pushy?
If you're actually engaged, there's no reason to not tell the parents. (To answer a question you didn't ask, however, it is possible that you were too pushy--maybe without knowing it--in getting engaged so soon in the first place. This gets us back to the "hard possibility" above. It might be that he proposed to you without thinking it through, and now he's skittish. If that's the case, for the sake of both of you, let him off the hook.)
Finally, how do I get him involved?