Explanation:

Let’s break it down:

- The question is asking about a group with internal functional differentiation, no territorial integrity, is pluralistic, and exists as part of a larger society.

- Option 1: Village – Villages usually have territorial integrity (a defined area). That doesn’t fit.

- Option 2: Tribe – Tribes are often defined by their own territory and distinct identity, even if they are part of a larger state. But “pluralistic” doesn’t fit well here, as tribes tend to be homogeneous.

- Option 3: Varna – Varna (social class in Indian society) is functionally differentiated, pluralistic, and exists embedded in larger society, but it’s more of a category in a social structure, not a community.

- Option 4: Peasant society – Peasant societies are rural communities, they have defined land (territorial integrity), not necessarily pluralistic.

- Here’s the thing: The correct answer is tribe. Tribes have internal divisions (clans, lineages), can lack strict territory, are pluralistic (subgroups), and are embedded within larger societies.

So, Option 2: Tribe is the best fit.