Correct answer: Option 2 differentiation

Differentiation is the process wherein the unspecialized cells of a young organism changes at it develops to have specialized structures and functions. In the diagram, the simple zygote composed of unspecialized cells differentiates to form skin cells, nerve cells, and muscle cells.

Fertilization is the process of combining two haploid gametes from different parents to form a new offspring.  Skin cells, nerve cells and muscle cells are not another organism but also parts of the zygote.

Evolution is the change of genetic material in a population of organisms from one generation to the next. The changes in the diagram occurred in a single organism not in a population of different generations.

Mutation is the change in the chromosomes or genes of a cell that may affect the structure and development of the resultant offspring. This also occurs in different generations of a population. Thus, option 4 in incorrect.