If h is small compared to R, then h2 will be even smaller compared to R2 and even 2*R*h will be much larger than h2. In that case we may neglect the h2 square term and say that g=g0*(R2)/(R2+2*R*h).
Then g=g0*1/(1+2*h/R). Now if we
multiply both numerator and denominator by (1-2*h/r) we
get:
g=g0*(1-2*h/R)/(1-4*h2/R2),
but remember that h/R is small so h2/R2
will be tiny and even 4 times it may be neglected compared to 1.
That leaves us the formula you started with, so you can see it
works only for h very small compared to R.
Frankly I think that using the real formula, g=g0*(R/(R+h))2, is easy enough that this approximation is hardly worth the trouble.
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