>If they really want small government they should really think about emigrating altogether.

We've thought about a lot of things. ;)
The FSP is based on a very simple concept: zionism. Any group will have more influence if its members live concentrated rather than dispersed. On most dimensions this doesn't matter, but in the case of politics it often does. Migration for the sake of human rights is nothing new in US history, e.g. blacks migrated north and Mormons migrated west. In an increasingly politicized and centralized USA, the stakes are getting higher, so people are flocking increasingly with their own kind. The book "The Big Sort" laments this:
http://www.thebigsort.com/

The US has 50 separate states for a reason. Let all the gun-banning socialists move to California, the gun-toting socialists move to Vermont, and the libertarians move to New Hampshire, the "Live free or die" state. This is political, with no racial, religious, or other such irrelevant components.

On the issue of borders and immigration libertarians are divided, but they typically do not base their opinion on country of origin. I have been with the FSP since its inception, and I am not the only black libertarian in New Hampshire.

The vast majority of the 800+ free-staters who have moved to New Hampshire are normal, law-abiding folk, and you wouldn't necessarily hear about them, any more than you would hear if your legislators are Mormon or Catholic. The Keeniacs are an exception, but there are no more than a dozen of them, plus a larger number of similarly rambunctious locals. Most free-staters (I am an exception) do not introduce themselves as free-staters.

Free-staters led the effort to legalize medical marijuana in 2009, getting a bill passed, but Democratic Governor Lynch vetoed it:
http://www.unionleader.com/article.aspx?articleId=41a9feee-02b4-4304-b1b7-7a44217412bf&headline=Lynch+vetoes+medical+marijuana+bill
http://nhcommonsense.org/

>They were completely inconsequential in the recent election

That was quite an amusingly false statement. To prove such a negative you would have to exert a bit effort. Anyway, it illustrates the degree to which free-staters fit in with the NH culture, which is why we chose NH in the first place.

>As someone born and raised in NH, this probably has very little to do with the Free State Project.

Free-staters were mentioned in the article, and they are among the bill's sponsors, but being an NH native wouldn't help you know that. Other than that, you are absolutely right: the FSP chose NH for all those reasons. It would be foolish, futile, and perhaps immoral, for a small movement to migrate to an unwelcoming location.