Introduction:
The earliest Tamil literature is known as Sangam literature. It holds great significance in Tamil culture and history. The term "Sangam" refers to an academy or assembly of scholars and poets who patronized and standardized Tamil literature. Among the given options, the correct answer is option 'C'. This answer explains why Sangam literature is called so.

Explanation:
The Sangam literature is named after the Sangam academy, which was established and maintained by the Pandya rulers at Madurai. The academy served as a platform for scholars and poets to gather and discuss various aspects of Tamil literature, language, and culture. It played a crucial role in patronizing and standardizing Tamil literature during the Sangam era.

The Sangam Era:
The Sangam era is believed to have spanned from 300 BCE to 300 CE. It was a period of great cultural and literary achievements in Tamil Nadu. The Sangam literature consists of a collection of poems and songs composed by numerous poets, who were recognized and celebrated by the Sangam academy.

Role of the Sangam Academy:
The Sangam academy, comprising of scholars and poets, played a significant role in the development and standardization of Tamil literature. The poets who were part of the academy were known as "Sangam poets." They composed poems and songs on various themes such as love, war, nature, and morality. These compositions were collectively known as Sangam literature.

Standardization of Tamil Language:
One of the important contributions of the Sangam academy was the standardization of the Tamil language. The academy established certain rules and guidelines for the usage and grammar of Tamil. This helped in unifying the language across different regions and ensuring its proper preservation for future generations.

Patronage by Pandya Rulers:
The Sangam academy was patronized by the Pandya rulers, who were powerful dynasties in ancient Tamil Nadu. They provided financial support and encouragement to the scholars and poets associated with the academy. The rulers recognized the cultural and literary importance of Tamil literature and actively supported its development.

Conclusion:
In conclusion, the earliest Tamil literature is termed as Sangam literature because it was standardized and patronized by an academy of scholars and poets maintained by the Pandya rulers at Madurai. This academy, known as the Sangam academy, played a crucial role in the development, preservation, and standardization of Tamil literature during the Sangam era.