The practice of drawing voting district boundaries on the basis of how

You cannot say what the author wants to say - "this is how people vote" or "this is how people are likely to vote". He could be saying either. You need to look for options that have errors and remove them.

To eliminate 4 wrong choices :

The practice of drawing voting district boundaries on the basis of how people are likely to vote is known as “gerrymandering” and has consistently been held by the federal courts to be unconstitutional.

(A) on the basis of how people are likely to vote is known as “gerrymandering”

(B) is, based on how people vote, known as “gerrymandering”
Based is ed modifier not placed next to noun it modifies "practise"
Also "based...." is in non-essential mod. Sentence loses meaning if removed.
Probability is removed (no likely)
Eliminate

(C) based upon how likely people are to vote is called “gerrymandering”
C is toughest to eliminate.
but 2 errors "People are likely to do something" and not "likely people do some thing"
likely needs to be placed as close to "to vote" as the adverb "to vote" modifies the adjective "likely"
are to has the same implication as will. sentence stands as likely people will vote
Eliminate
Additional info
based correctly reaches the head of the noun phrase in this case practise

(D) is likely to be called “gerrymandering” when based on how people vote
Meaning
Is likely to be called happens "at the same time as" the practise is based.
When can either start a relative clause in which case it mods period
OR
a subordinate clause (in this case reduced) in which case it modifies subject of nearest clause or the clause in which the reduced clause appears.
Both these do not apply in this case
Eliminate.

(E) is known, based on how people are likely to vote, as “gerrymandering”
Same as B.

Let's go meaning this out .... how people are likely to vote democrat or republic will determine the outlining of boundaries. The elections a re a future event
(A) on the basis of how people are likely to vote is known as “gerrymandering” . HOLD

(B) is, based on how people vote, known as “gerrymandering” ---- THE PRACTICE IS KNOWN AS Y , this is the main clasue and is fine , however the non essential modifer should be an essential modifer , also how people vote changes the meaning to practice is based on a past event (how people voted) . Out

(C) based upon how likely people are to vote is called “gerrymandering” . Meaning changes to are people even likely to vote ? Out

(D) is likely to be called “gerrymandering” when based on how people vote . Is the process likely to be called or we already know about the process ? Out

(E) is known, based on how people are likely to vote, as “gerrymandering” . Meaning -- Practice is already known and and the knowing is based on how people are likely to vote. Also why is the additional description made non essential by including thenfo between two commas. Out

A seems the best

OFFICIAL EXPLANATION

The correct answer is (A).

The original version is correct. Choices (B) and (E) awkwardly split the grammatical element is known as. Choice (C) alters the meaning of the original sentence, suggesting that gerrymandering involves determining voting districts based on whether people vote rather than on how they vote. Choice (D) distorts the meaning of the word gerrymandering.

Mona2019:
Point 1 is questionable but point 2 is correct. We don't need to worry about point 1 because of point 2.

Thank you for helping me out VeritasKarishma
Just one more question on the response.
why the omission of likely can not be considered as meaning change error.

If the second point was fixed and still likely was missing, will it not be an incorrect answer.

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