The correct answer is option 'C', a Marshalling yard.

A Marshalling yard is a railway yard in which wagons are received, sorted, and new trains are formed. It is an essential part of the railway system that helps in the smooth operation and organization of trains and wagons.

Here is a detailed explanation of why the correct answer is option 'C':

1) Definition of a Marshalling Yard:
- A Marshalling yard, also known as a classification yard or a hump yard, is a specific area in the railway system where incoming trains are disassembled, wagons are sorted based on their destinations, and new trains are formed for outbound journeys.
- It is usually a large complex with numerous tracks, switches, and facilities to facilitate the efficient movement and organization of wagons.

2) Purpose of a Marshalling Yard:
- The primary purpose of a Marshalling yard is to sort and classify wagons based on their destinations and types of cargo.
- It allows for the efficient grouping of wagons with similar destinations, which helps in creating new trains that can travel directly to their respective destinations without unnecessary detours or delays.
- By sorting wagons based on their destinations, it also enables efficient transfer of wagons between different trains and railways, improving the overall logistics of the transportation system.

3) Functioning of a Marshalling Yard:
- When a train arrives at the Marshalling yard, it is disassembled, and the wagons are uncoupled.
- The wagons are then organized into groups based on their destinations and types of cargo.
- The yard operators use switches and humps to manipulate the movement of wagons and guide them onto the appropriate tracks.
- The hump is a raised portion of track that allows gravity to assist in moving wagons down specific tracks, enabling efficient sorting and classification.
- Once the wagons are sorted, they are reassembled into new trains based on their destinations and types of cargo.
- The newly formed trains are then ready for departure to their respective destinations.

In conclusion, a Marshalling yard is the correct term for a railway yard where wagons are received, sorted, and new trains are formed. It plays a crucial role in the efficient organization and movement of trains and wagons within the railway system.