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.