This will probably get lost amongst the outrage but just in case - there are 2 different parties
A joint friends birthday was the "natives and colonials" one in 2005 where William dressed as a leopard and Harry as a nazi officer.
Williams own 21st birthday was in 2003 with the theme "out of africa" - that's the one where william allegedly dressed as an African war chief. I say allegedly because I haven't seen anything to confirm what he was wearing but articles from the time suggest pretty much all the attendees, including the Queen and the rest of the royal family were in fancy dress, many of which (a banana and "colonial style" atire) would be considered inappropriate even then and definitely today.
Fancy dress parties often skirt the boundaries of taste in my opinion- I thought Adele having a titanic themed party, for example was pretty inappropriate but most people didn't have an issue with that. Same with ww2 themed fancy dress -ive never really underdtood why getting kids to dress as evacuees is celebratory. I think the vast majority of people would agree that a nazi uniform is never appropriate though.