Even in a democracy, it is necessary to restrict the dissemination of

The question means there are 4 assumptions in 5 answers.
I negated all the answers to find the non-assumption answer. If the negation damaged the author's conclusion/position (Dissemination to certain countries, those that are or will be competitors or enemies, should be selectively prohibited. There must, however, be free exchange of scientific information) -> the answer is an assumption -> eliminate it.
The remain is the correct answer.

Thus, I eliminated A,B,D and E, leaving C. Negating C does not damage the author's position --> C is the correct answer.

the objectives stated are -

1. Restrict the dissemination of advanced technical knowledge (and selectively prohibit dissemination to countries that are enemies or competitors)
2. Free exchange of scientific information.

This is an EXCEPT question. Each of the incorrect answer options should support the objectives.

Option A - Incorrect.
If it is indeed possible to distinguish friendly or noncompetitive countries, it is then possible to restrict the dissemination of knowledge to such countries. Supports point #1.

Option B - Incorrect.
this strengthens point #1. this means that the dissemination of advanced technical knowledge can be restricted without negative consequences.

Option C - Correct.
We are concerned with restricting the dissemination of advanced technical knowledge. We are not concerned with basic scientific research.
Also, we are not concerned with comparing democracies to undemocratic countries but rather with whether the objectives stated above can be achieved or not in any type of country. (the question says - "even in democracies").
Option C is irrelevant to the context and does not support any of the objectives. Hence, the correct answer.

Option D - Incorrect.
If this is true, then we can restrict the dissemination of advanced technical knowledge without adversely impacting the free flow of scientific information (point #2).

Option E - Incorrect.
This supports point #1. If such information cannot be restricted from being passed across national boundaries, then point #1 would be weakened.
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option C should be the right answer .
analyzing option C we can yourself that do we really care about democratic or not democratic countries and even it is mentioned in the stimulus that 'Even in a democracy, it is necessary to restrict the
dissemination of advanced technological knowledge, then it would definitely be restricted in non-democratic countries , after negating C it does not affect the stimulus in a way we want . hence C

--if the info is of commercial/national-security value, it's dissemination needs to be restricted.
--if the destination is to current/future competitors/enemies, the dissemination of that type of info should be prohibited.
--but there must be free exchange of scientific info.

(A), (D), (E) can be quickly eliminated as they are required for the principle to follow.

(C) is irrelevant. We don't care if some research is more advanced in one country than another, we only care if they have commercial/national-security value. Besides, "basic scientific research" is just out of scope.

It took me a while to determine if (B) is relevant. but then I realized if the public have "detailed knowledge" of the country's advanced technology, the dissemination would already have been taken place
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OE as per Kaplan:

This one has a weird question stem. “Necessary to rely on” is LSAT code for “a necessary
assumption.” What they’re getting at is that four of the choices are assumptions necessary
to the reasoning; it follows that the right answer must either be outside the scope, or
contradict the text.

The issue is this: How freely should advanced technology be passed around? Even a
democracy, the author asserts, must restrict its dissemination when national security or
commercial value is at stake and prohibit access to potential enemies or competitors. Does
that seem to contradict the last sentence—that free exchange of scientific information is
required? No: There is a scope difference between scientific information in general, which
the author argues should be kept free, and advanced technology, which may be restricted.
Now, all of that depends on the ability to make a distinction between that which should be
freely exchanged and that which may be prohibited, so (D) is an assumption that the author
must make: There has to be a way to separate out the sensitive tech stuff. By the same token,
if potential enemies and competitors are to be frozen out, it has to be possible to identify the
potential foes . . . so (A), too, is an assumption necessary to the logic. If either (A) or (D) is
in doubt (here’s the Kaplan Denial Test at work), then one could not follow the author’s
dictates with confidence.
Given their references to things like public policy and multinational corporations, the
other two necessary assumptions (a/k/a wrong choices) might not seem within the author’s
scope, but they sure prove to be so. The author must rely on (B), that the people in a
democracy don’t need to know all about its advanced technology in order for the country
to function. Why? Because if (B) is false—if the people do need that knowledge—then the
restrictions on disseminating advanced technology are utterly inappropriate. Similarly, if
(E) is false—if one cannot keep advanced technology from crossing borders more or less
willy-nilly—then the whole idea of keeping such technology out of the hands of selected
countries is a ludicrous one. The author must believe, with (E), that multinational
businesses notwithstanding, a nation can restrict where its advanced technology is shared.
All of the above is moot, of course, if you recognize that (C)’s issue—namely, which type of
political system has more advanced technology—is totally outside the scope of the
author’s recommendations, which inferably apply to all countries, “even in a democracy.”
(That’s what “even” means in this context: The advice is not just restricted to democracies.)
With luck you saw (C)’s irrelevant distinction before spending an unwarranted amount of
time on the other four choices.

• When a stem indicates that the right answer is an “odd man out,” consider looking
for it directly as your first line of attack. Slogging through the four wrong choices
may take more time. Don’t do so unless you have to.
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Even in a democracy, it is necessary to restrict the dissemination of advanced technological knowledge that is of commercial or national-security value. Dissemination to certain countries, those that are or will be competitors or enemies, should be selectively prohibited. There must, however, be free exchange of scientific information.

In order to act in accordance with the position above, it would be necessary to be able to rely on each of the following EXCEPT:

Only problem that one may face is to miss EXCEPT part in question stem.

(A) It is possible to distinguish with confidence, despite any changes in the international environment, friendly or noncompetitive from hostile or competitive nations.

(B) In a democracy, it is not necessary that the public have detailed knowledge of the country’s advanced technology in order, for example, to make informed decisions about the direction public policy should take.

(C) In most fields of science, basic scientific research is further advanced in countries that are democracies than in countries that are not democracies.

(D) In each field of science, it is possible to distinguish scientific information from advanced technological knowledge that is of commercial or national-security value.

(E) In cases where a company that uses advanced technology is a multinational organization, it is possible to keep information about the technology from being passed across designated national boundaries.

C is clearly the differentiator among the five that make no sense to the passage.
Two important aspects of the passage are:
1. National boundaries - A and E touch on that from national-security point of view.
2. Commercial or national-security value and scientific information - D touches that by differentiating.

B more or less says what passage mentioned.

Answer C.
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