Unfortunately the IANA decided to kill the TLD altogether, but the Chagos islanders have been asking to get control of it themselves so they can receive the registration fees. This was sort of the worst of both worlds: they could have given the Chagos islands it’s own TLD, or given control of .io to the Chagos islanders, but instead they just said, “you’re not sovereign, so you get nothing”.

edit: I’m reading elsewhere that it’s not yet decided for sure whether to kill the TLD, but no one seems to think it will be given to the Chagossians, unfortunately.