Well, it can and it can't. They can try to censor it, and in doing so they can make things difficult and cause trouble, but in the end there's no truly effective way to censor it.
The reason is that, no matter if in hindsight they'd consider this a mistake or not, fact is governments past set up the internet without much thought to the long term repercussions. The focus was on enabling communication, thoughts about truly censoring it wouldn't take real hold until people realized how big and important it would one day become. And governments past made the strategic decision that they were still better off overall of everyone had access to secure encryption than if nobody did. The nature of cryptography means the only secure algorithms are ones that are open and vetted world wide. There's just no way to have both good encryption for yourself AND not enable it for everyone else too. And it was decided that the government would rather be sure its secrets would stay secret, and the online financial systems could work safely, even if it meant their enemies had access to the same abilities.
As a result, we have a global communications network that can be made completely secure, virtually anonymous, and impossible to censor. I say can be, not is. In reality as we all know security beaches happen all the time. But it is almost without exception because of the same reason every time. People who don't understand encryption thinking that logically a public encryption algorithm can't be as safe as one you devised yourself, when in fact the opposite is true because it's impossible for a small group to match the combined intelligence of the entire world, either in skill or raw attempts. Every broken encryption scheme in history just about has been due to this mistake. Mifare transit cards, DVD encryption, WEP, WPS.
So, if we really really had to, we could have the internet enable communications to be totally safe and secure. But in reality that's often not the case because people are complacent,and ignorant. So, the government can try to censor things, have minor victories where mistakes were made. But in the end, so long as you and I can establish a secure connection to each other over an unsecured channel, which we can. The capacity is there. So they can try, but they can't ever win the battle for the internet. Because what's required for their victory would destroy the global online banking system with it. And they may wanna censor us, control people, but they'll never risk the money for it. Even then that's a hypothetical. It's already too late, the damage is done (from their perspective). I'm speaking hypothetically, if one day asymmetric cryptography is cracked by quantum computing or whatever, and the opportunity arises for them to try change things, the reason they still wouldn't is it would hurt them too much in the process.
Either everyone can be secure or nobody can. And since people screw up plenty on their own, any sane government, evil or not, corrupt or not, would elect the status quo over an alternative. Effectively censoring people isn't worth the enormous damage to themselves and society from the destruction of the digital financial system. Not to mention state secrecy.