What is the practice of marriage within a kin group, caste, or a group living in the same locality called?

Endogamy

The correct answer is Option (2) → Endogamy

Types of marriages in ancient India:

Endogamy refers to marriage within a unit - this could be a kin group, caste, or a group living in the same locality.
Exogamy refers to marriage outside the unit.
Polygyny is the practice of a man having several wives.
Polyandry is the practice of a woman having several husbands.