Because that was the title of the sovereign of Luxembourg on independence, as it was previously in personal union with the King of the Netherlands.

By the time the territory had gained independence, not only were nobility titles had been well established, and there was equally little to be gained from changing the title to something more grandiose, and consequently, there was little pressure both little pressure by the society, elites, or the monarch to self-proclaim the territory as a Kingdom.

One can add to that, the lack of tradition in that regard, as even in the days of the height of the power of Luxembourg in the Middle Ages, Luxembourg was never considered as a Kingdom.

Thank you for the explanation. But why do the grand dude's siblings styled as princes and princesses?