Dead Men Risen, written by Toby Harnden and published by Quercus, took the prize at a ceremony in Westminster and was the judges' unanimous choice.
It focuses on the death of Lt Colonel Rupert Thorneloe in 2009.
It was published in amended form after the first print run was destroyed by the MoD.
The judges said the book "takes us into the hearts and minds of the Welsh Guards in a way that is both interesting and visceral".
"It challenges every citizen of this country to examine exactly what we're asking soldiers to do in Afghanistan," the panel continued.
"Rather than offering easy answers it lets the soldiers speak for themselves."
Other awards presented included a posthumous honour for Christopher Hitchens, whose final book, Arguably, was included on the long list for the top prize.
Hitchens' widow Carol Blue accepted the award on behalf of the Vanity Fair writer.
The journalism prize was awarded to Amelia Gentleman for her work in The Guardian, while the blog award went to Rangers Tax Case - an online commentary on the ongoing financial problems at the historic Scottish football club.
The writers of the blog said they aimed to "provide the details of what Rangers FC have done, why it was illegal and what the implications are for one of the largest football clubs in Britain".
The winners were chosen from shortlists of six books, six journalists and seven bloggers, whittled down from longlists of 17 books, 12 journalists and 18 bloggers.
Each of the winners received a Â£3,000 prize.
A book about the death of a British officer in Afghanistan, once pulped by the Ministry of Defence, has won the Orwell Prize for political writing.