Loktak Lake is situated in the State of Manipur. Option 1, Sikkim, is incorrect because Loktak Lake is not located in Sikkim. Option 3, Odisha, is also incorrect because Loktak Lake is not located in Odisha either. Option 4, Mizoram, is also incorrect because Loktak Lake is not located in Mizoram. Therefore, the correct answer is option 2, Manipur.

It is important to note that Loktak Lake is the largest freshwater lake in Northeast India and is famous for its phumdis, which are floating islands made of decomposed plants, soil, and other organic matter. These phumdis are unique to the lake and are used by the local communities for fishing, agriculture, and even as a habitat for wildlife. Loktak Lake is not only a tourist attraction but also plays a crucial role in the ecology and economy of Manipur. It is home to several species of flora and fauna, including the endangered Manipur brow-antlered deer, also known as the Sangai. The lake also serves as a source of livelihood for the local communities who depend on fishing and agriculture for their sustenance.