How? It's a well defined term. If you don't have a publisher and are independent, that's what indie means. It has nothing to do with budget. Even an indie game can be AAA, because the term AAA refers to how expensive it was. These are two different subjects.

That’s not how the term is used. Definitions are descriptive, not prescriptive. Wikipedia’s definition is far more useful.

Take the game “Animal Well.” Go look it up if you haven’t heard of it. Animal Well was programmed by a single person, Billy Basso, as developer “Shared Memory.” It was then published by Videogamedunkey’s company “Bigmode,” the very first title Bigmode published.

By your definition, Animal Well is not an indie game. But it’s exactly the kind of game meant by the term “indie game.” So your definition isn’t a useful one.

Which means Witcher 3, Baldurs Gate 3 and GTA 6 are indie titles, while the majority of the indie game award nominees and winners are not because they have 3rd party publishers.

Well defined indeed.

So you would call Half Life 2 and Alyx indie games? But any game published by Devolver Digital like Loop Hero or Gato Roboto aren't indie despite having tiny budgets and tiny teams?

That's kind of a ridiculous definition. It makes way more sense to include criterias like team size and budget, however vague they are.