Option 1 states that the territories entering into a subsidiary alliance with the British were responsible for their own internal and external protection. This statement is not correct. In a subsidiary alliance, the British would actually take responsibility for the defense and protection of the ally`s territory. The purpose of the subsidiary alliance was for the British to have political control and establish a military presence in the ally`s territory.

Option 2 correctly states that in the territory of the ally, a British armed contingent would be stationed. This was part of the terms of the subsidiary alliance, where the British would station their troops in the ally`s territory to maintain control and protect British interests.

Option 3 correctly states that the ally would have to provide resources for maintaining the British contingent in the territory. This was a financial burden placed on the ally, as they had to bear the cost of maintaining the British troops stationed in their territory.

Option 4 correctly states that the permission of the British was needed for the ally to enter into agreements with other rulers. This was another way for the British to maintain control and prevent the ally from forming alliances that could threaten British interests.

In summary, option 1 is incorrect because the territories entering into a subsidiary alliance with the British were not responsible for their own internal and external protection.