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.