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The Megalithic culture in South India, which existed from 500 B.C. to A.D. 100, is known for a particular characteristic - graves encircled by large stones. Option 1, weapons made of stone, is not a correct choice as the Megaliths did not primarily use stone weapons. Option 2, tools and implements made of stone, is also incorrect as the Megaliths did not focus on stone tools. Option 4, articles of daily use made of stone, is not accurate as the Megaliths did not mainly produce everyday objects from stone.
Thus, option 3, graves encircled by big pieces of stones, is the correct choice as it accurately represents the key feature of the Megalithic culture in South India. It signifies the practice of constructing burial sites with large stone enclosures, which is an important aspect of this historical period.