The correct answer is option 4, Lakshadweep. Lakshadweep is the smallest Union Territory in India in terms of geographical area.

Let`s analyze the other options mentioned in the question to understand why they are not the correct answer:

Option 1: Chandigarh. While Chandigarh is a Union Territory, it is not the smallest in terms of geographical area. Chandigarh is known as a city and a union territory, but it serves as the capital for the states of Punjab and Haryana.

Option 2: Puducherry. Puducherry, also known as Pondicherry, is another Union Territory. However, it is not the smallest in geographical area. Puducherry has a larger land area compared to Lakshadweep.

Option 3: Dadra and Nagar Haveli and Daman and Diu. These two Union Territories were merged into a single Union Territory in 2020. Although they are small in geographical area, they are still larger than Lakshadweep.

Hence, Lakshadweep is the correct answer as it is the smallest Union Territory in terms of geographical area.