That's certainly a valid position! We have to take the current meaning of words into account, not just their origin.
However, in this particular case there is the unfortunate fact that "Indian" has two entirely unrelated meanings. As an Indian myself, in fact part of whose family hails from parts of India that give rise to that color, I always feel sad for the Native Americans having to bear a name of a people from half-way around the world due to an accident of poor navigation. But the other (Asian) notion of "Indian" has not slipped away into history, making this the only relevant one to take into account.
[Language slippage is much on my mind right now as I'm in the midst of an utterly fascinating book on the topic of how languages evolve, "The Unfolding of Language" by Guy Deutscher. And the word "Plantations" is as well, because we have a proposition right now in Rhode Island to remove it from the name of the state, with even the governor supporting it: https://ballotpedia.org/Rhode_Island_Question_1,_Name_Change_Amendment_(2020)
"Navajo White" is also interesting, because it's a reference to the color of the Navajo flag. TBH, I had previously not really known much of anything about the Navajo flag (https://en.wikipedia.org/wiki/Navajo_white#/media/File:Navajo_flag.svg
) — it's not common to find here in RI. (The term "Navajo" is, as I understand it, itself a bit problematic, but it's a term that the Navajo Nation has adopted for itself.)
It may help to understand where our color names come from. There's a classic list of colors that was compiled for X11, an old graphics standard for Unix systems dating back to the 1980s:
Many of these color names came to be adopted by the Web standardization folks:
So these aren't names we made up, at all. We're just following well-established computing standards.
Now, not being actual historians, semioticists, etc., I think our best plan would be to let these things be decided by the Web standards committee and follow their lead. They have whole groups of people who do nothing but think about these names, and also have high visibility, so that these — the Web colors — are far more likely to be noticed by those who are offended than the color list of puny little Pyret. If the Web colors committee decides to rename a color, we would immediately follow. Even if there is enough contention about a color and we feel it's inappropriate, we would not have to wait for them to act first.
But absent such controversy, we also favor following standards: a student can look up colors on third-party Web sites and be confident they will "just work" when entered into Pyret. There is real value to that.