The correct answer is A. in.
The preposition “in” is used to indicate a location within a building or other structure. In this case, the town hall is a building, so the preposition “in” is the most appropriate choice.
The preposition “on” is used to indicate a location on the surface of something. In this case, the town hall is not located on the surface of anything, so the preposition “on” is not the most appropriate choice.
The preposition “at” is used to indicate a location near or close to something. In this case, the town hall is not located near or close to anything, so the preposition “at” is not the most appropriate choice.
The preposition “by” is used to indicate a location next to or beside something. In this case, the town hall is not located next to or beside anything, so the preposition “by” is not the most appropriate choice.