In political science, the term State has a more specific and definite meaning- the word State means a community or society politically organized under one independent government within a definite territory. It alone has the prerogative of making laws. The law-making power derives from sovereignty, which is the most distinctive characteristic of the State. Hence, Option 1 is correct.
The state has four essential elements. These are population, territory, government, and sovereignty (or independence).
The first two elements constitute the physical or material basis of the state while the last two form its political and spiritual basis.
The state can be defined as the centralized, law-making, law-enforcing, politically sovereign institution in society.
In other words, it is useful to understand and define the State in terms of the functions it performs.
Put briefly and simply, the State Comprises a set of institutions with ultimate control over the means of violence and coercion within a given territory; Monopolizes rule-making within the territory;
Develops the structures for the implementation of the rules;
Regulates market activity within the territory; and
Ensures the regulation and distribution of essential material goods and services.