These are stage directions (A). As you probably know, The Importance of being Earnest is a play. This scene is not one that would be read out to the audience, it is what the audience would see on stage, ie stage directions. Since you are reading the play's script and cannot see the action on stage, stage directions have been provided for you in your text.
The example that best describes it is the 1st one; since "dramatic irony" occurs when the audience (<em>readers</em>) understands what's going to happen, and knows about certain characters' actions, or event, and the characters are unaware of it; hence the characters actions go on a different way.
The tactic is used to make the audience more involved; thus it often creates this feeling of being powerless in the readers' mind, to do anything about it.
So the best statement is: "<em>The reader knows that the human neighbors plan to destroy Animal Farm</em>"
c.why there is tension between the two sides in the tournament.
It is important to know this fact about the time period because it helps to explain some of the characters' behaviors in the tournament. The tension is not simply because of the contest. It is more deeply rooted because of the tensions between the Saxons and the Normans. Tension between sides does not usually result in indifference so option a is definitely wrong. Lady Rowena is the queen of the day because she was chosen by the winning knight - not because of the tensions. Also, tensions would not cause someone to defer.