**Core Concept**
Councilman bodies are apoptotic hepatocytes characterized by pyknosis and karyolysis, indicative of acute viral hepatitis. They represent a hallmark feature of this condition, resulting from the body's immune response to viral infection.

**Why the Correct Answer is Right**
Councilman bodies are formed due to apoptosis, a process mediated by caspases, which cleave DNA and proteins within the cell. In the context of viral hepatitis, the immune system mounts a response against infected hepatocytes, leading to activation of caspases and subsequent apoptosis. This results in the characteristic pyknosis and karyolysis seen in Councilman bodies.

**Why Each Wrong Option is Incorrect**
**Option A:** Councilman bodies are not typically associated with fatty liver disease, which is characterized by steatosis and inflammation, but not apoptosis.
**Option B:** Councilman bodies are not a feature of alcoholic liver disease, which typically presents with steatosis, inflammation, and fibrosis.
**Option C:** Councilman bodies are not a hallmark of non-alcoholic steatohepatitis (NASH), which presents with steatosis, inflammation, and fibrosis.

**Clinical Pearl / High-Yield Fact**
Remember that Councilman bodies are a classic histopathological feature of acute viral hepatitis, and their presence should prompt consideration of this diagnosis in the clinical context.

**Correct Answer:** D.