What does 'Shangri' refer to in the context of the Basholi Paintings?

The correct answer is Option 3- A place of residence of a branch of the Kullu royal family

The Sanskrit epic, Ramayana, was one of the favourite texts of the hill artists at Basohli, as well as, Kullu. This set derives its name from ‘Shangri’, the place of residence of a branch of the Kullu royal family, patrons and formerly possessors of this set. These works of Kullu artists were influenced in varying degrees by the styles of Basohli and Bilaspur.