Final answer:
The smooth papules with central umbilication likely represent Molluscum contagiosum, a viral infection that produces small raised bumps on the skin. It should not be confused with Impetigo, which manifests through vesicles and pustules that rupture into crusted sores.
Step-by-step explanation:
The smooth papules 1-mm size that is dome-shaped with central umbilication with a white "plug" described in the question are most likely indicative of Molluscum contagiosum. Molluscum contagiosum is characterized by small raised bumps on the skin and is caused by a viral infection. Impetigo, in contrast, presents as vesicles, pustules, or bullae that rupture, leading to crusted sores often with a yellowish crust and exudate draining from the lesions. Options such as basal cell carcinoma or scarlet fever do not typically present with features described in the question like central umbilication and a dome-shaped papule.