What was the reason Harry didn't tell the town to evacuate before the Volcano did erupt?

Harry did not immediately evacuate the town of Dante's Peak because his superior advised him not to.

Remember that when Harry first arrived at Dante's Peak to investigate the activity of the volcano, he noticed warning signs that the volcano was close to an eruption:

While exploring, they find dead trees, dead squirrels, and even two people boiled to death by a hot spring.

Harry convinces the Mayor to call a City Council meeting to discuss putting the town on alert. Harry's superior appears at the meeting and stops him:

Harry tries to convince Rachel and the executives to prepare the town for a possible disaster, while he is discussing this, Paul arrives with his team (who were at the local motel) and explains that years ago, he feared that Mammoth Mountain was going to erupt and warned a few towns around it, however it didn't erupt. But the rumor had been leaked out to the public and caused tourists to stay away. Which nearly resulted in a town becoming bankrupt. He explains that they will be there to see if the volcano really is going to erupt. But the signs of an eruption could also be a false alarm.

So, Harry knew that the volcano would erupt a few weeks before he discovered that the town's water was contaminated. He wanted the evacuation earlier, but he was stopped.