Final answer:
Option (D), Tom Watson undermined the Populist Party by aligning with the Democratic Party, causing a split in the vote and diminishing the party's identity.
Step-by-step explanation:
Tom Watson undermined the Populist Party in the years following the 1896 election by aligning with the Democratic Party, which led to a split in the Populist vote. As the Populist convention chose to endorse the Democratic candidate William Jennings Bryan but nominated their own vice-presidential candidate, Tom Watson, the party struggled to retain its separate identity.
This alignment with a major party diminished the distinct political position of the Populists and led to their decline as an independent force in American politics.