Are you using the term "Loli" to mean something along the lines of "sexualised young female character"? It's pretty commonly used for any young or young looking character these days, with sexualisation having nothing to do with it. There's a bit of debate about what the actual criteria are for a character to be a Loli but sexualisation isn't required by the most common usages.
I often hear the argument about the origins of the word but to be honest I just don't think it holds weight, it's common usage is more important I'd say. Language is a funny thing. I guess it's useful to have a word for the common type of character that doesn't require people to say "I like young girls" or to use highly specific complex and conditional wording to avoid saying that. Admittedly, "I like Lolis" could be fairly easily misinterpreted too but I think it works better since it usually differentiates between real young girls and young girl anime characters.
If you want to complain about increased fanservice involving or sexualisation of a particular character then it might be easier to just say that (or something along those lines).
Having said all that, I don't claim to be some expert on language or authority on how it should be used. Still, based on your use of the term and not having any real experience with the Fate universe, I did wonder if Illya had been an adult character in previous appearances (presumably not, judging by the responses).