Meaning of Lakshadweep is "one hundred thousand islands" in Sanskrit and Malayalam. The islands form the smallest Union Territory of India and their total surface area is just 32 square km. It is located between 8º to 12º 13″ North latitude and 71º – 74º East longitude. It is from 220 to 440 Km away from the coastal city of Kochi in Kerala, in the emerald Arabian sea. Andaman and Nicobar Islands comprise 572 islands. Its total geographical area of about 8,249 square km and Daman and Diu With an area of 112 square km. While Dadra and Nagar Haveli’s total area is 491 square km.
So above data clear that Lakshadweep is the smallest island in India in terms of area. So the correct option is C.