It is on paper. You can host your own PDS (low-resource-requirement server that stores your posts). in practice, well over 90% of users use the default PDS, and even if you don't, you're subject to the whims of the relay (big-iron datacenter type server that retrieves posts from every PDS and aggregates them into a single stream for appviews to then display) that other people use to look at your posts. Bluesky is the main relay, and they have been known to censor people for the crimes of speaking out in favor of trans people in sports, or being Palestinian. Blacksky, a competing relay, seems to be a bit better, though I don't personally know much about it. But the fact remains that running a relay server is really expensive, therefore few people can afford to do it, and a relay server is a gateway through which all posts must pass before they can be seen, therefore it's a censor's dream, and those two facts together make Bluesky de facto centralized.