Which of the following statements is correct in reference to the princely states in India during British rule?

All the statements are correct.

British India was divided into what was 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. The Princely States covered one-third of the land area of the British Indian Empire and one out of four Indians lived under the princely rule.