Because the word was dangerous in law, and because a vaguer word was more useful in politics. Two reasons, and the chapter gives the evidence for both.
1. Sedition. Under colonial law it was a crime to write anything “promoting sedition or rebellion against the authority of a state or monarch” (the chapter’s own margin note, p. 46). The chapter shows exactly how that worked: Tilak was first prosecuted in 1897 for articles “which incited violence”, “although there was no evidence”; he was jailed again in 1908 for sedition because of his articles in Kesari, in a trial the chapter calls “rushed and unfair”; and Bande Mataram itself “was suppressed while the Alipore trial went on”. A newspaper that printed the word ‘independence’ in plain type would have been shut down and its editors jailed within weeks — and then it could not spread the idea at all.
2. Reach. In 1906 the Congress had just adopted Swaraj, and the chapter tells us it “was not defined — it was understood to have a range of meanings, from self-rule within the British Empire to full independence.” That vagueness was not an accident. A paper arguing for ‘absolute national autonomy’ could be read approvingly by a Moderate who wanted dominion-style self-government and by a Nationalist who wanted the British gone. ‘Independence’ would have split the readership on day one.