Charles Moore's authorised biography of Margaret Thatcher has been shortlisted for the Orwell prize, the prestigious literary award for political writing set up in honour of George Orwell.

The award, which aims to reward the book which comes closest to Orwell's ambition "to make political writing into an art", had previously drawn fire for its longlisting of the Conservative journalist's biography of the late former prime minister, with Conrad Landin suggesting in the Independent that Orwell would have "cutting words" about a prize "heaping laurels on establishment figures who write about fashionable establishment subjects", instead of rewarding writers who "say the unsayable". But director of the prize Jean Seaton, a historian, said she had "lost count of the number of people who come up to me and wag their fingers and say they know Orwell would be turning in his grave about this or that".

"Orwell was never one for not noticing reality, and she mattered," Seaton said of Thatcher, and Moore's biography. "I think he would say that the book is incredibly adept and sharp and astute about her. Personally I think it is an extraordinary book, a psychological insight into her, although just at the end he arrives on the side of her politics."

Andrew Rawnsley's Observer review of the book found that Moore "mines his sources skilfully without becoming their captive", and that "his prose is more considered and his conclusions more nuanced than his partisan journalism".

Orwell, Seaton speculated, "would have read [the biography] but what he would have thought of it I don't know. That's the thing about Orwell – he is not predictable. And I'm not going to let Orwell be captured by some parts of the political spectrum. He was a radical, both in his ideas and his extraordinary integrity."

Moore's biography of Thatcher is competing for the £3,000 award with former home secretary Alan Johnson's memoir of his childhood This Boy, and David Goodhart's controversial claim that mass immigration is damaging, The British Dream. Last year, Goodhart was snubbed by the Hay festival over his book's claims, with the author telling the Guardian that the event's organiser Peter Florence rejected him because of his own convictions about "pluralism and multiculturalism".

The prize shortlist is completed with James Fergusson's in-depth look at Somalia, The World's Most Dangerous Place, Gaiutra Bahadur's Coolie Woman, the journalist's pursuit of her great-grandmother's story – a pregnant woman who sailed from India to Guyana as a "coolie" in 1903 – and Frank Dikötter's history of the Chinese revolution, The Tragedy of Liberation.

The six books were chosen from 235 entries by judges Sue MacGregor, Robert McCrum and Trevor Phillips, with the winner to be announced on 21 May. "The shortlist demonstrates the continuing power and resonance of political history," said Seaton. "Many of the authors in this shortlist are extremely close to their subjects, both intellectually and personally. This makes for compelling writing that we would be more poorly-equipped without."

Also announced was the shortlist for the journalism prize, which includes Guardian journalists Ghaith Abdul-Ahad, Aditya Chakrabortty and Jonathan Freedland. Seaton paid tribute to journalism that "hums with vivid language and clear thought" as well as the "adventurous and brave reporting".

James Astill, AA Gill, Gideon Rachman, and Mary Riddell complete the journalism prize shortlist.

The shortlist:
Coolie Woman by Gaiutra Bahadur (Hurst)
The Tragedy of Liberation by Frank Dikötter (Bloomsbury)
The World's Most Dangerous Place by James Fergusson (Bantam, Random House)
The British Dream by David Goodhart (Atlantic)
This Boy by Alan Johnson (Bantam, Random House)
Margaret Thatcher: The Authorised Biography by Charles Moore (Penguin Allen Lane)