Of the options presented here, the best answer is Option C. To understand why this is so, we must pay attention to both parts of the term “optimal fragmentation.”
In Guns, Germs, and Steel, Diamond argues that China lost its lead over Europe because it was too unified. He says that China did not have to compete with anyone and that it, therefore, was not forced to make any progress. By contrast, Europe was fragmented and the competition caused by the fragmentation forced Europeans to get ahead technologically and in other ways. This would imply that fragmentation is a good thing.
However, we must remember that the word “optimal” is also part of this formula. Diamond is not simply saying that fragmentation is always good. Instead, he says that fragmentation is good up to a degree. For example, in this interview, he says that India was “hyperfragmented” and that this fragmentation was a real problem for the subcontinent.
Clearly, Diamond does not believe that either A or D is true. That leaves C as the most plausible answer to this question.