The formation of `Mushroom rock` in a desert region is an example of abrasion. Abrasion is a process in which wind-blown sand particles collide with rock surfaces, gradually wearing them down and shaping them into unique formations. In the case of a Mushroom rock, the softer layers of rock underneath are eroded more quickly than the harder layers above, resulting in a mushroom-like shape.

Deflation, option 1, refers to the removal of loose surface material by wind action. While wind is involved in the formation of Mushroom rocks, deflation alone does not explain the specific shape of this geological feature.

Attrition, option 2, refers to the process of sediment particles colliding and breaking each other down. This process is not directly involved in the formation of Mushroom rocks.

Erosion, option 4, is a general term that encompasses various processes like abrasion, but does not describe the specific mechanism behind the formation of Mushroom rocks.

In conclusion, the correct option is 3 - Abrasion.