In this direct and indirect speech question, choose the option that correctly reports the past continuous situation: "We were living in Dehradun," they told me.

Introduction / Context:
This question examines your understanding of how to report a sentence in the past continuous tense. The original sentence tells us that at some earlier time they were living in Dehradun. When converting this into indirect speech, we often change past continuous into past perfect continuous, especially in exam style questions that focus on sequence of tenses. This type of question is common in grammar tests dealing with reported speech involving past actions.

Given Data / Assumptions:

• Direct sentence: "We were living in Dehradun," they told me.
• Reporting verb: told, in the simple past tense.
• The verb phrase is were living, which is past continuous.
• The subject of the reported clause is we, referring to they in the report.
• The place is Dehradun, which remains unchanged.

Concept / Approach:
In reported speech, when the verb in the direct speech is in the past continuous, it often changes to the past perfect continuous after a past reporting verb. Thus, were living becomes had been living. The pronoun we changes to they because the speakers are referred to in the third person in the report. The place name Dehradun remains the same. The correct reported form that matches the strict tense sequence rule is They told me that they had been living in Dehradun.

Step-by-Step Solution:
Step 1: Keep the reporting clause They told me as it already uses told. Step 2: Introduce the reported clause with that for formality. Step 3: Replace we with they because the speakers are now being referred to in the third person. Step 4: Change were living into had been living to follow the standard backshift from past continuous to past perfect continuous. Step 5: Retain in Dehradun exactly as it is, since proper nouns do not change in reported speech.

Verification / Alternative check:
The final sentence is: They told me that they had been living in Dehradun. It shows that their stay in Dehradun had been ongoing before the time of speaking reported in the past. The sequence of tenses is consistent: past reporting verb told and past perfect continuous had been living. This is the form expected in many examination keys for this type of structure.

Why Other Options Are Wrong:
Option B keeps were living, which is sometimes acceptable in real speech but does not follow the strict backshift pattern often tested in exams.
Option C changes the aspect entirely to lived, which suggests a more general fact rather than an ongoing past activity.
Option D uses had lived, which can suggest a completed stay rather than an ongoing situation at a past time.
Option E adds for some time, which is not given in the original sentence and therefore introduces new information.

Common Pitfalls:
Students may be unsure when to backshift past continuous to past perfect continuous and may either overuse or underuse this change. Another issue is altering the meaning by changing aspect, for example from continuous to simple. Pronoun changes, especially from we to they, also cause problems. To avoid mistakes, remember the usual pattern: were doing often becomes had been doing in strict exam style reported speech when the reporting verb is in the past.

Final Answer:
They told me that they had been living in Dehradun.