The city famous for its historical fort and palaces is:

Indore
Bhopal
Gwalior
Jabalpur

The correct answer is C) Gwalior.

Gwalior is a city in the Indian state of Madhya Pradesh. It is located in the Malwa region, on the banks of the Chambal River. Gwalior is a major tourist destination, known for its historical fort and palaces. The city is also home to a number of temples and mosques.

The Gwalior Fort is one of the largest and most impressive forts in India. It was built in the 7th century by the Tomar Rajputs. The fort is surrounded by a moat and has a number of gates. The main gate is the Gwalior Gate, which is decorated with intricate carvings. The fort also has a number of palaces, including the Man Mandir Palace, the Jai Vilas Palace, and the Moti Mahal Palace.

The Man Mandir Palace is a 16th-century palace built by Raja Man Singh Tomar. The palace is known for its beautiful architecture and its intricate carvings. The Jai Vilas Palace is a 19th-century palace built by Maharaja Jayajirao Scindia. The palace is one of the largest palaces in India and is known for its opulent furnishings. The Moti Mahal Palace is a 19th-century palace built by Maharaja Scindia. The palace is known for its beautiful gardens and its elegant architecture.

Gwalior is also home to a number of temples and mosques. The most famous temple in Gwalior is the Teli Ka Mandir, which is a Hindu temple built in the 10th century. The mosque is the Jama Masjid, which is a mosque built in the 16th century.

Gwalior is a city with a rich history and culture. It is a popular tourist destination, known for its historical fort and palaces. The city is also home to a number of temples and mosques.