Background:
Mahatma Gandhi, the leader of the Indian National Congress, played a pivotal role in India's struggle for independence from British rule. He advocated for nonviolent resistance and launched several movements to challenge British authority. One such movement was the 'Individual Satyagraha,' which was initiated due to dissatisfaction with the August offer made by the British government during the Second World War.

Explanation:
The 'Individual Satyagraha' was a unique campaign launched by Mahatma Gandhi in 1940 as a response to the British government's failure to meet the demands of the Indian National Congress. Let's examine the options to understand why Gandhi took this step:

a) Government of India Act, 1935:
The Government of India Act, 1935 was a significant piece of legislation passed by the British Parliament. While it introduced certain reforms, it also eroded the autonomy of local bodies. However, this act was not the primary reason for the launch of the 'Individual Satyagraha.'

b) Religious intolerance in the countryside:
Religious intolerance was indeed a pressing issue during that time, but it did not directly lead to the launch of the 'Individual Satyagraha.' Gandhi, being a staunch advocate of religious harmony and unity, addressed this issue through various means, including the promotion of communal harmony and dialogue.

c) August offer made by the British:
The August offer was a proposal made by the British government in 1940 during the course of the Second World War. It included the promise of greater representation for Indians in the government and the possibility of a future Dominion status for India. However, it failed to meet the demands of complete independence, which was the primary objective of the Indian National Congress. This dissatisfaction with the August offer led Gandhi to launch the 'Individual Satyagraha.'

d) State of untouchables in the country:
The state of untouchables, also known as Dalits, was a significant issue in India's social fabric. Gandhi dedicated a considerable portion of his life to fighting against untouchability and advocating for the rights of Dalits. However, the launch of the 'Individual Satyagraha' was not directly related to this particular issue.

Therefore, the correct answer is option 'c'- August offer made by the British during the course of the Second World War. The dissatisfaction with the limited concessions offered by the British government in the August offer motivated Gandhi to launch the 'Individual Satyagraha' as a means to escalate the struggle for complete independence.