Totipotency can be defined as :

The correct answer is Option (1) → Capacity to generate whole plant from any cell/explant

Option (1) Capacity to generate whole plant from any cell/explant — Correct. An explant is any part of a plant grown in a test tube under sterile conditions. A whole plant can grow from it, and this is the basis of tissue culture and micropropagation.

Option (2) Capacity to survive in unfavourable environment condition — Incorrect. This describes adaptation or tolerance to stress, not totipotency.

Option (3) Ability to conduct water in 100 meter tall tree — Incorrect. Water rises in tall trees through the xylem, pulled up by transpiration. This has nothing to do with totipotency.

Option (4) The duration of dormancy of seeds and other propagules in angiosperms — Incorrect. Dormancy is a period of reduced activity that lets seeds survive until conditions are good.

NCERT Extract:
Biotechnological Applications in Agriculture – “… As traditional breeding techniques failed to keep pace with demand and to provide sufficiently fast and efficient systems for crop improvement, another technology called tissue culture got developed. … It was learnt by scientists, during 1950s, that whole plants could be regenerated from explants, i.e., any part of a plant taken out and grown in a test tube, under sterile conditions in special nutrient media. This capacity to generate a whole plant from any cell/explant is called totipotency.”