Read the passage and answer the question:

British India was divided into what were called the British Indian Provinces and the Princely States. The British Indian Provinces were directly under the control of the British government. On the other hand, several large and small states ruled by princes, called the Princely States, enjoyed some form of control over their internal affairs as long as they accepted British supremacy. This was called paramountcy or suzerainty of the British crown. Princely States covered one-third of the land area of the British Indian Empire and one out of four Indians lived under princely rule. Just before Independence it was announced by the British that with the end of their rule over India, paramountcy of the British crown over Princely States would also lapse.The British government took the view that all the princely states were free to join either India or Pakistan or remain independent if they so wished.

The problems started very soon. First of all, the ruler of Travancore announced that the state had decided on Independence. The Nizam of Hyderabad made a similar announcement the next day. Rulers like the Nawab of Bhopal were averse to joining the Constituent Assembly. This response of the rulers of the Princely States meant that after Independence there was a very real possibility that India would get further divided into a number of small countries. The prospects of democracy for the people in these states also looked bleak. This was a strange situation, since the Indian Independence was aimed at unity, self-determination as well as democracy. In most of these princely states, governments were run in a non-democratic manner and the rulers were unwilling to give democratic rights to their populations.

During British rule, on what condition were the princes allowed a degree of control over their internal affairs?

They have to accept British supremacy.

The correct answer is Option 1 - They have to accept British supremacy.

As per the passage:

British India was divided into what were called the British Indian Provinces and the Princely States. The British Indian Provinces were directly under the control of the British government. On the other hand, several large and small states ruled by princes, called the Princely States, enjoyed some form of control over their internal affairs as long as they accepted British supremacy. This was called paramountcy or suzerainty of the British crown. Princely States covered one-third of the land area of the British Indian Empire and one out of four Indians lived under princely rule.