Wow. Um, your faith in freedom of expression and the goodness of human nature winning out against a long-established socioeconomic military industrial complex juggernaut with magic backing it up is touching.
...Have you read many of Shadenight's other stories, by any chance? Or the tags on this story?
Oh wait, my bad. You must have thought that my entire reasoning was for Henry to spring out some sort of Revolution and the establisment of Democracy via his 'heretical' books.
Well, no. Henry, as I mentioned before, is not targeting neither the priests nor the peasants as his fanbase. It's the very young, very impressionable nobles he wants. The current generation is too indoctrinated to accept his radical ideas about co-existance and so on, but the next generation is the one he can manipulate.
They will starting loving the characters Shade's experienced writing is introducing to them and will accept them despite their faults. They will keep it close to their minds because it's so radically different from the usual tales of dragons and knights. And lastly, they are teenagers. If their parents tell them that this book is heretical and a bad influence, they will ignore them and continue reading them anyways.
And as VortexRyder said, there is also Germania, who will probably embrace this radical and amazing book and laugh at the face of the uptight priests that screech it is heretical and barbaric. Which means that it can be publized there and distributed secretly to bars and taverns, that in turn supply it to the aformentioned young nobles.
And when they eventually grow up and take part in a crusade they might come to think: 'Hey, why am I fighting these guys? What did they do to me? They haven't attacked Halkeginia despite their sheer skill in magic and not insignifant numbers, why should I go kill myself because some guy in robes told me to? What am I even doing here?'
In other words, Henry's objective is not to change the status quo of Halkeginia, which would be very bad (see French Revolution), but to make the young generation of nobles to think the consequences of their actions and to focus more on fixing their world and not throwing themselves at the OP elves with Hax skillz, to take back the so called 'Holy Lands'.
Lastly, I have read many of Shadenight's fics and I noticed a distinct patern on how he solves his problems: he uses his brain!
No last minute powerup, no nakama/friendship superpower, no overpowering attacks with embarassing names (unless he chuuni's for the lolz), just plain logic and knowing which buttons to press.
Like in his Fate fic, he manipulates Saber Lily, who is also powered by one of the most powerful magus that ever lived and is half-homunculus, into turning to Berserker just by pushing her rage button like a kid with a sugar rush. Hell, he actually turns Joanne D' Arc, a Servant so saintly and nice she was chosen as the Ruler class, the referee for the Holy Grail War, into a yandere
by sheer accident!
So trust me, if there is one person that can pull this off, then It's Hate (Henry-Shade).