Which of the following best defines the term 'species'?

The term 'species' is best defined as a group of individuals that can interbreed and produce fertile offspring. This definition emphasizes both the potential for reproduction and the outcome of that reproduction, which is the ability to produce offspring that can also reproduce. It reflects the biological species concept, which is widely accepted among biologists because it highlights the importance of genetic continuity and shared characteristics within a group.

This concept helps to distinguish one species from another based on reproductive isolation, meaning that members of different species typically do not mate and produce fertile offspring together. This is crucial in understanding how species evolve and adapt over time, as reproductive barriers can lead to the development of distinct species through mechanisms such as natural selection and genetic drift.

The other options do not adequately capture the defining features of a species. For example, merely being a group of organisms living in the same habitat does not necessarily indicate a shared genetic lineage or reproductive capability. Similarly, grouping organisms by classification units like genera or by a general population designation lacks the specific biological context of reproduction that defines species.