In the following question, sentences are given with a part in bold. The given phrase in bold may or may not contains an error. The options following can replace the incorrect phrase. The correct phrase that is to be replaced will be your answer. If the sentence is correct then select ‘No improvement required’ as your answer.

Water overuse is a huge issue that a lot of peoples are dealing with.

The correct option to replace the bold phrase is "a lot of people are".

Step-by-Step Explanation:

1. Noun Form ("people" vs. "peoples"):
The word "people" is already the plural form of "person" when referring to a group of human beings. Therefore, using "peoples" in this context is grammatically incorrect. "Peoples" is only used when referring to distinct ethnic groups, nations, or cultural populations.

2. Quantifier ("a lot of"):
The quantifier "a lot of" correctly modifies plural countable nouns like "people".

3. Subject-Verb Agreement:
Since "people" is a plural noun, it takes a plural verb. The present continuous tense verb "are dealing" correctly agrees in number with the plural subject "a lot of people".

Combining these corrections, the original incorrect phrase "a lot of peoples are" should be replaced by "a lot of people are".