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Should the image on page 12 say that this is an Basic Game Setup for 4 players, because it does not make sense that you would be distributing all 7 colors in the basic game.
Note the player has 2 citizens of two unused colors in that example.
Yes, that is clearly a typo.
Some others we noticed:
The backs are switched on the Anne Putnam Jr. and Anne Putnam Sr. tiles.
On page 10 the caption for the gallows mentions the "cubes" originally planned for the game that were supposed to have been replaced by wooden meeples, but actually came in the game as cardboard "tokens" (a.k.a. "cheaples" in the KS comments.)