^^^
Another possibility is that the universal translator accidentally translated for us a Klingon proper name as "Imperial" because that's what the name means. Just as you might say the Chinese Ming Dynasty, Picard might've said the Klingon Klorg Empire, but "klorg" is also the Klingonese word for "imperial."
Do I sound too much like, Timo?
If you want an in-universe explanation... Capt. Picard misspoke. The guy makes mistakes too. And nobody on the bridge corrected him, because a) it wasn't so important that moment, everybody knew what he meant and b) he's the captain. (I think Barack Obama once referred to the "57 states" in the U.S. too

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