Final answer:
The incorrect word in the sentence is D) "there," which should be replaced with the possessive adjective "their" to indicate ownership of the backyard.
Step-by-step explanation:
The underlined word used incorrectly in the sentence "Heather and Allen want to create a safe home for a barn owl family in there backyard." is "there." The correct word that should be used in this context is "their," which is a possessive adjective showing that the backyard belongs to Heather and Allen.
The word "there" is an adverb indicating a location, which does not fit the context of the sentence. Therefore, the appropriate sentence should be: "Heather and Allen want to create a safe home for a barn owl family in their backyard."