The old lady declared that she was going to walk where she pleased. They had the liberty.

The correct answer is D. The old lady declared that she was going to walk where she pleased. They had the liberty.

Option A is incorrect because it uses the past tense “was” instead of the present tense “is.” Option B is incorrect because it uses the first-person plural pronoun “we” instead of the third-person singular pronoun “she.” Option C is incorrect because it uses the past tense “was” instead of the present tense “is” and the third-person plural pronoun “they” instead of the third-person singular pronoun “she.”

The old lady is declaring that she is going to walk where she pleases, and she has the liberty to do so. This is a statement of fact, and it is not necessary to use the past tense or the first-person plural pronoun. The third-person singular pronoun “she” is the most appropriate pronoun to use in this sentence.