Final answer:
A referendum is a process allowing citizens to vote directly on a proposed law or policy in their city or state. The correct answer is option B.
Step-by-step explanation:
The sentence that best describes a referendum is: Citizens vote directly on a proposed law in their city or state. In the context of direct democracy in the United States, a referendum is a process where the government asks citizens to vote 'yes' or 'no' to confirm or repeal a law or policy that the government has proposed. This gives citizens the opportunity to directly influence legislation.