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It's almost certainly in development (Chris King + known secret project = 95+% chance of it being Vicky 3), but he hasn't been back at the studio long enough for it to be developed enough for release yet. (And Paradox has been burned badly in the past by announcing a project too far in advance of a game actually being ready.)
 
Somewhere in this interview is a part about why there hasn't been a vic3 yet. Its an interesting vid that handles game development.

 
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Well, looks like Vic 3 is bummed for this PDXCON. They said they would announce 2 games, and those are Imperator Rome and Age of Wonders: Planetfall.

TBH I think Vic 3 is neither in design nor going to be.
 
What is a Chris King?

Chris King was a game designer on Victoria 2 (and other titles). He is now back at the company and working on something unannounced.

ChrisKing_GameDesigner2_1.jpg
 
perhaps theres just so much hype and so many requests that they feel under too much pressure and will only announce it when they feel as if they can make a game worthy of the hype around it, or when it is almost complete and just waiting for bugfixes and release.
 
Because they can only work on so many games at once, keep supporting and expanding their games very long after launch (which is awesome but drains a lot of resources that could have been used for making new games) and they decided to launch a new version of Rome before Vicky. Between EU IV, HoI IV, CK II, Stellaris and Rome, I suspect that the Paradox studio is already stretched to the limit. A new Victoria game is probably planned already, and likely they already have plenty of ideas and plans for it, but they just don't have the resources and time to make it yet. Which means that it will be coming, but it is still quite far in the future. At least, that is what I think is happening.