I think you may be surprised by the answer to that question. Truth be told, just about every historical out there uses some modern language. If not modern words themselves, then at least modern usage. Language has evolved over time, and the further back you go, the more foreign the language becomes to us. So a dedicated author could, in theory, write prose that is fairly authentic to his chosen period, but imagine what the poor reader would have to go through trying to decipher such antiquated language. I know of one such writer, Patrick O’Brian, whose meticulous research actually results in novels that very well could have been written in the 18th Century. While I admire O’Brian’s superior achievement in authenticity, I personally had one hell of a time comprehending Master and Commander, due to the language. There are a couple of writers here at The Macaronis who write age-of-sail with a decided shift towards modern language usage, and their novels are quite a bit easier to digest.
So what the historical writer should strive for is a delicate balance between the authentic and the modern. It is desirable to use enough words and phrases that the reader will recognize as being appropriate to the era and therefore be sold on the illusion of authenticity, but at the same time blend in enough modern language so the reader will comprehend what he is reading. Of course it is the personal preference of the writer and editor how far to tip the scale in either direction. Some writers, like O’Brian, will prefer to be heavily weighted on the authentic end, while other writers may choose just the opposite and go way towards modern.
For The Filly I tried to discard anything that I knew readers would clearly recognize as anachronistic, as that is the first thing that will break the illusion, but rather than use 100 percent authentic language from the real Old West, I tried to emulate the language of the old Hollywood Western movies. But for the discussions between my two protags regarding sexuality, of course there was no point of reference from the old movies as the subject was taboo, so I shifted to what I imagined real people in that time and place would say to each other and how I though they might say it.
Now, the next subject I’d like to bring up is translation. If, for example, you are reading War and Peace or Les Miserables, the only way for you to authentically experience the language is to learn Russian and French and read them in their original text, otherwise you are reading a translation that is of course an approximation of what was originally written. If one were to write about ancient times such as the Romans, English as we know it didn’t exist back then so of course everything written will be an interpretation anyway. So if a writer naturally tells an ancient story in modern words, who’s to say he can’t write a not-so-ancient story in modern terms as well, and just consider it a “translation” from the old words that would have been used into modern words that today’s readers can fully understand? Hey, the Bible’s been translated into modern English, so why can’t an historical be written that way? There is no reason it can’t. In fact a few of the recent historicals I have read do just that. But I will warn the writer that if he does take that approach, he should be prepared that some readers just aren’t going to tolerate it.
It’s really all a matter of personal choice, but what makes the historical something special is that it creates an illusion for the reader that he is witnessing the past, and it is up to the writer to maintain that illusion, and the words he chooses can make all the difference.