Since their formula
$$\lvert f^{(n)}(x)\rvert \lt 10^\frac {n}{3}$$
is a general formula for $n=1,2,3,4,5$, the question is not asking you to estimate the error for all different $n$'s. In your case, $n=2$.
So the error bound will be
$$\frac{1}{3!}f^{(3)}(\xi)(x+1)(x-1)(x-2)$$
where $x=0$ and $|f^{(3)}(\xi)|<10^{2/3}$. This gives
$$\frac{1}{3}10^{2/3}$$
To get the maximum error we need to find the maximum of
$$\left|\prod_{i=0}^n\left(x-x_i\right)\right|=\left|\prod_{i=0}^n\left(x-x_0-ih\right)\right|=\left|h^{n+1}\prod_{i=0}^n\left(\frac{x-x_0}h-i\right)\right|=\left|h^{n+1}\prod_{i=0}^n\left(t-i\right)\right|$$
Where $t=\frac{x-x_0}h$ and $0\le t\le n$. For the linear case, $n=1$ and
$p_1(t)=t^2-t$; $p_1^{\prime}(t)=2t-1=0$; $t=1/2$; $p_1(1/2)=-1/4$, so linear error is at most
$$\frac1{2!}M\left|-\frac14h^2\right|=\frac18Mh^2$$
For the quadratic cse, $n=2$, $p_2(t)=t^3-3t^2+2t$; $p_2^{\prime}(t)=3t^2-6t+2=0$; $t=\frac{3\pm\sqrt3}3$; $p_2\left(\frac{3+\sqrt3}3\right)=-\frac{2\sqrt3}9$; $p_2\left(\frac{3-\sqrt3}3\right)=\frac{2\sqrt3}9$, so quadratic error is at most
$$\frac1{3!}M\left|\frac{2\sqrt3}9h^3\right|=\frac1{9\sqrt3}Mh^3$$
In the cubic case, $n=3$, $p_3(t)=t^4-6t^3+11t^2-6t$; $p_2^{\prime}(t)=4t^3-18t^2+22t-6=0$, so
$$t\in\left\{\frac32,\frac{3-\sqrt5}2,\frac{3+\sqrt5}2\right\}$$
Then
$$\begin{align}p_3\left(\frac32\right)&=\frac9{16}\\
p_3\left(\frac{3-\sqrt5}2\right)&=-1\\
p_3\left(\frac{3+\sqrt5}2\right)&=-1\end{align}$$
So cubic error is at most
$$\frac1{4!}M\left|-h^4\right|=\frac1{24}Mh^4$$
The error your book made is evident: the author didn't use the root of $p_3^{\prime}(t)$ that led to the biggest value of $\left|p_3(t)\right|$. To make this more clear, let's look at the graph of $p_3(x)=x(x-1)(x-2)(x-3)$:
As can be seen, the biggest values of $\left|p_3(x)\right|$ happen at the two outer local extrema, leading to the largest estimate for the error. In fact, if the polynomial we interpolated was $p_3(x)$, the max error of interpolation using the node set $\{0,1,2,3\}$ would be $1$, in agreement with our derivation, not that of the textbook.
This is an aspect of the Runge phenomenon: this polynomial oscillates wildly, with the biggest swings at the outermost local extrema. See what it looks like for $p_7(x)$:
Best Answer
We're estimating $\sin$ here; those derivatives in the numerator are derivatives of $\sin$. That means they alternate between sines and cosines - and there's a nice uniform bound we can put on them. No matter what $\xi$ is, $|f^{(n+1)}(\xi)|\le 1$.
And with that, you have a bound $\frac{2^{n+1}}{(n+1)!}$ for $|f(x)-p(x)|$ in $[-1,1]$ that depends only on $n$.