It's been a long time since I've played it, but looking at it now, it seems to be solvable every time (given that you can halve the possible options with each guess, and looking at word choices, it's been deliberately designed such that you CAN). Essentially you do a modified binary search, guessing words that halve the number of remaining possibilities. Usually binary search with 4 guesses would let you narrow it down from 16 possibilities (2^4), but you also get to utilize 3 guesses for confirming or denying specific words (because unlike in standard binary search, you know the list of options), so actually you actually have enough information to uniquely identify the password from among 19 options... and looking at it there are 19 plain-text words there.

For example, when you are guessing FARMING and get 4/7 correct, you know FARMING isn't the correct password, and that the remaining candidates are
ROAMING (MING correct)
GAINING (A correct, ING correct)
HEARING (A correct, ING correct)
MORNING (R correct, ING correct)
and a couple of other options.

MANKIND is a useless guess because it matches to FARMING in only 3 places (A, I, N) and was already ruled out.