**Core Concept**
Non-pitting oedema is a clinical manifestation of lymphoedema, characterized by the accumulation of protein-rich fluid in the interstitial tissue due to impaired lymphatic drainage. The severity of lymphoedema is graded based on its clinical presentation and physical examination findings.

**Why the Correct Answer is Right**
Grade II lymphoedema is characterized by the development of non-pitting oedema, which does not reduce on elevation of the limb. This is due to the irreversible damage to the lymphatic vessels and the subsequent fibrosis of the affected limb. The non-pitting nature of the oedema is attributed to the high protein content of the fluid, which makes it resistant to compression. The absence of a reduction in oedema on elevation of the limb further supports the diagnosis of Grade II lymphoedema.

**Why Each Wrong Option is Incorrect**
**Option A:** Latent lymphoedema is characterized by pitting oedema that reduces on elevation of the limb, making it an incorrect choice for non-pitting oedema that does not reduce on elevation.
**Option B:** Grade I lymphoedema is characterized by pitting oedema that reduces on elevation of the limb, which contradicts the clinical presentation described in the question.
**Option D:** Grade III lymphoedema is characterized by severe fibrosis and atrophy of the affected limb, with a significant reduction in limb volume. While it can present with non-pitting oedema, the absence of a reduction in oedema on elevation of the limb makes it less likely to be the correct answer.

**Clinical Pearl / High-Yield Fact**
It's essential to note that lymphoedema is a chronic condition that requires early recognition and management to prevent its progression. The International Society of Lymphology recommends a comprehensive approach to lymphoedema management, including complete decongestive therapy, exercise, and compression garments.

**✓ Correct Answer: C. Grade II**