**Core Concept**
Diphtheria toxin is a potent exotoxin produced by Corynebacterium diphtheriae, a Gram-positive bacterium. The toxin is responsible for the systemic manifestations of diphtheria, such as myocarditis and neuropathy, and is a key virulence factor in the disease.

**Why the Correct Answer is Right**
The correct answer is A. Toxin is phage mediated. Diphtheria toxin is encoded by a gene carried by a temperate bacteriophage (a virus that infects bacteria), known as the corynephage beta. This phage integrates into the bacterial genome, providing the toxin gene to the bacterium. The toxin is then produced by the bacterium and causes the systemic manifestations of diphtheria.

**Why Each Wrong Option is Incorrect**
**Option B:** Toxin is required for local infection - This is incorrect because while the toxin contributes to the severity of the disease, local infection can occur without toxin production. In fact, some strains of C. diphtheriae can cause disease without producing toxin.

**Option C:** Endotoxaemia causes systemic manifestation - This is incorrect because diphtheria toxin is an exotoxin, not an endotoxin. Endotoxins are components of the bacterial cell wall, whereas exotoxins are proteins produced by bacteria. Diphtheria toxin is responsible for the systemic manifestations of the disease, not the endotoxins.

**Option D:** Toxin acts by inhibiting synthesis of capsule - This is incorrect because diphtheria toxin actually inhibits protein synthesis in host cells, not the synthesis of the bacterial capsule. The toxin works by catalyzing the ADP-ribosylation of elongation factor 2 (EF-2), which prevents protein synthesis in host cells.

**Clinical Pearl / High-Yield Fact**
It's worth noting that the toxin is not produced by all strains of C. diphtheriae, and some strains may produce a non-toxigenic form of the bacterium. This is why vaccination against diphtheria is still an important public health measure, even in areas with low disease incidence.

**✓ Correct Answer: A. Toxin is phage mediated**