If a digital currency replaced a fiat currency, wouldn't it then in fact be fiat?
Depends what you mean by
fiat. The word itself means "not voluntary", but in the context of economics, it is taken to mean "a virtual (valueless) currency" because those are the currencies that people will not use by choice.
Bitcoin is new. It is a fully virtual currency, but not one that anyone is being forced to use. Kinda hard to call that fiat. We need a new word to describe it.