No it's not an error...
In fact the wizardry series is pretty confusing..
If i am right, Knights of Diamonds is in fact Wizardry III in Japan, while it's considered as episode 2 in the rest of the world..
Just do a google search for "ウィザードリィ III" (wizardry III), you'll see it's knights of diamonds.
I think it's confusing cause wizardry II is episode 3 and wizardry III is episode 2...
Of course 99% of non-Japanese websites list knights of diamonds as wizardry II...
But then.. What can we say about the original famicom game ?