In case somebody doesn't read the above link, here is an excellent excerpt:
Jaw harp is a 20th century creation. It was first suggested as an origin of Jew's harp as pure conjecture - there is no evidence of that name ever being used in common parlance before then. From that point, several different music historians indulged in sloppier and sloppier research, until jaw harp as an origin progressed from baseless conjecture to absolute "truth".
Jaw harp, then, is not an invented term intended to be politically correct, but is rather a misnomer brought to life by bad scholarship. In its favor, jaw harp is a misnomer of a misnomer - a quirky name for a somewhat quirky instrument.