Magoosh Official Explanation:
A question about Ernst Haeckel, the biologist responsible for the idea "Ontogeny recapitulates phylogeny."
Split #1a: "held" + [infinitive] vs. "held" + "that"-clause. Choices (A) & (B) have the former, and the remaining three choices have the latter. The construction "hold P to be Q" is highly suspect: while it may appear in some contexts, it would never be part of a correct answer on the GMAT. What we have in (A) & (B) is even worse ---- "hold P to do X" --- "hold" + [subject] + [action-verb infinitive phrase]: this is wrong 100% of the time. Choices (A) & (B) are incorrect.
The construction "hold that [clause]" is perfectly correct, so long as what follows "that" is a full clause with a bonafide [noun]+[verb] structure. Here, (C) & (D) & (E) all have full clause after the word "that", so these are correct.
Split #1b: in this "that" clause, subject-verb agreement. The subject of the "that" clause in all three of these choices is "the individual development", which is singular, so we need a singular verb. Choice (C) has "passes", which works. Choice (D) has "pass", a plural verb, which is incorrect. Choice (E) has "had passed", a past perfect verb that could be either singular or plural, so as far as verb-number goes, this works.
Split #1c: verb tense. For the two verbs that pass the subject-verb agreement test, let's talk about the tense. What are we discussing in this part of the sentence? We are discussing something that is true about animals out there in an ongoing way. Bird fly. Wolves howl. We use present tense verbs for this, even when it's an idea of someone in the past. Past people thought that pigs fly. Past people believed that wee people run wild in the woods. Past people believed that salamanders survive fire. All present tense verbs. Thus, we need the present tense verb "passes", which (C) correctly has. The past perfect makes no sense in context, so (E) is incorrect.
Split #2: "previous" vs. "previously". What is previous to what here? What the sentence is trying to say is that the "evolutionary stages" (which happened long before the existence of the individual animal) came before the individual animal's own development. Thus, we need an adjective, "previous", modifying the noun "evolutionary stages." The adverb "previously" could only modify the verb passes/pass/had passed/etc., but this verb does not happen before anything else discussed in the sentence. The adverb "previously" is incorrect, and choices (B) & (D) & (E) make this mistake.
Because of all of these splits, the only possible answer is (C).