Pointing to a lady, Diwakar said, “Her mother’s only grandson is my son.” How is that lady related to Diwakar?

The correct option/answer is Wife.

Let us break down the relations step-by-step to understand the connection:
1. Identify the lady's mother's only grandson:
The lady's mother's only grandson would be the son of either the lady herself or the son of the lady's sibling (if she had any). Assuming the direct line of relation, the lady's mother's grandson is the lady's own son.
2. Relate this to Diwakar's statement:
Diwakar says: “Her mother’s only grandson is my son.”
Substituting our finding from Step 1, this statement becomes: “The lady's son is my son.”
3. Determine the relationship between the lady and Diwakar:
Since the lady's son is also Diwakar's son, they share the same child. Therefore, the lady must be Diwakar's wife.