Terminal velocity is the constant velocity reached by a falling object when the force of gravity pulling it downwards is balanced by the opposing force of air resistance. At this point, the object no longer accelerates and its velocity remains constant. Therefore, the correct answer is option 'C' - it remains constant.

Explanation:
1. Definition of terminal velocity:
- Terminal velocity is the maximum velocity that an object can attain when falling through a fluid (such as air) due to the opposing force of air resistance.
- When an object initially falls, it accelerates due to the force of gravity. However, as it gains speed, the force of air resistance also increases until it equals the force of gravity.
- At this point, the net force on the object becomes zero, resulting in a constant velocity known as terminal velocity.

2. Forces acting on a falling object:
- The force of gravity pulls the object downwards, causing it to accelerate.
- Air resistance acts in the opposite direction, increasing with the speed of the object.
- Initially, the force of gravity is greater than the force of air resistance, so the object accelerates.
- As the object accelerates, air resistance increases until it equals the force of gravity, resulting in a net force of zero.

3. Balanced forces and constant velocity:
- When the net force on an object is zero, the object experiences balanced forces.
- In the case of an object falling with terminal velocity, the forces of gravity and air resistance are balanced.
- Since there is no net force acting on the object, it no longer accelerates and its velocity remains constant.
- The object continues to fall at this constant velocity until it reaches the ground or encounters another force.

In conclusion, when a body falls under gravity and reaches terminal velocity, its average velocity remains constant. This is because the opposing force of air resistance balances the force of gravity, resulting in a net force of zero and no further acceleration of the object.