The correct answer is option 1, the Government of India Act, 1858. This act was passed by the British Parliament after the Indian Rebellion of 1857. It marked a significant change in the governance of India as it transferred the administration of the country from the East India Company to the British Crown.

Under this act, the territorial division of governance in India was done. It established a dual system of administration in which power was shared between the British government and the Indian authorities. The British government controlled the central administration, while the Indian authorities had limited powers over their respective territories. This act also introduced the concept of provincial governments and introduced legislative councils at the provincial and central levels.

Alert - correct answer should be option 4, the Government of India Act, 1861. This act further expanded the territorial division of governance in India by reorganizing the provinces into two categories - the "presidencies" and the "non-presidency" provinces. The presidencies included Madras, Bombay, and Bengal, which were administered directly by the Governor-General. The non-presidency provinces were administered by Lieutenant Governors.