The Sanskrit word 'yavana' is used for:

Greeks

The correct answer is Option (2) → Greeks

We often take the terms Hindu and Muslim for granted, as labels for religious communities. Yet, these terms did not gain currency for a very long time. Historians who have studied Sanskrit texts and inscriptions dating between the eighth and fourteenth centuries point out that the term musalman or Muslim was virtually never used. Instead, people were occasionally identified in terms of the region from which they came. So, the Turkish rulers were designated as Turushka, Tajika were people from Tajikistan and Parashika were people from Persia. Sometimes, terms used for other peoples were applied to the new migrants. For instance, the Turks and Afghans were referred to as Shakas and Yavanas (a term used for Greeks).