[hosay123]

Not disagreeing with your conclusion, but..

> In real life, if you are accused of hiding information in a well known text, you could just show that your version of the text exactly matches the original, and so there is no scope for hiding information.

Except a pre-agreed set of excerpts in a particular order forms a codebook, and the order in which they are delivered easily becomes a code. The code's symbols need not just be excepts, but some combobulation involving the position of the excerpt in the source text, length of quotation, etc. etc

Picking a random book from Project Gutenberg, War and Peace has almost 12,000 paragraphs going by the HTML version. That's enough to encode one and a half words from any of the 235k entries in OS X /usr/share/dict words with just 2 quoted paragraphs