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Indigence specifically denotes a state of extreme poverty or neediness. It describes a condition where individuals lack the basic necessities for a minimum standard of living, often resulting in a situation characterized by dire financial constraints.

While "impoverishment" also relates to a state of being poor, it is a process rather than a static condition. It refers to the act of becoming poor or the process of losing wealth, rather than a direct description of someone currently in a state of poverty. "Indolence," on the other hand, refers to a tendency to avoid work or activity, which does not relate to financial condition. "Innocence" is an entirely different concept, often associated with purity or lack of guilt, and does not indicate any economic condition.

Thus, the term "indigence" directly aligns with the definition sought after in the question regarding a state of poverty or neediness.