**Core Concept**
The question is testing the student's ability to identify a dermatological condition characterized by linear verrucous plaques on the trunk, associated with vacuolization of keratinocytes in the spinous and granular layers of the epidermis. This is a classic presentation of a specific skin disorder.

**Why the Correct Answer is Right**
The correct answer is a condition known as Lichen Striatus. It is a rare, self-limiting skin condition that typically affects children, characterized by linear or curved bands of erythematous, scaly, or verrucous papules. Histopathologically, it shows vacuolization of keratinocytes in the spinous and granular layers, consistent with the description in the question. This vacuolization is due to the degeneration of keratinocytes, which is a hallmark of Lichen Striatus.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because it does not match the histopathological features of the condition described in the question. The correct answer, Lichen Striatus, has a distinctive histopathological appearance that is not characteristic of this option.
**Option B:** This option is incorrect because it is a different skin condition that presents with a different clinical and histopathological appearance. The condition described in the question does not match the features of this option.

**Clinical Pearl / High-Yield Fact**
Lichen Striatus is a self-limiting condition that typically resolves on its own within a few weeks. It is essential to distinguish it from other skin conditions, such as linear psoriasis or lichen planus, which may have different treatment approaches.

**Correct Answer:** C. Lichen Striatus.