As far as I know, this period of Japan did have bright colors, but mostly for the rich. There was plenty of gaudy clothing, but not for the poor.
So, the Flower Capital having colorful clothing isn't that far off, but character like Tama having brightly colored clothing is historically inaccurate.
Honestly, would have made a big impact if the Flower Capital was brightly colored, and Tama and Ebisu Town citizens were covered in dirty, dull-colored rags. I guess Orochi only took over 20 years ago, so it's not too crazy with Wano's history, it's just inaccurate with ancient Japan.