Concept:
The Harappan civilization gives some evidence of religious and ritual practices.
The famous Pashupati seal is often discussed in relation to yogic posture.
Step 1: Check Assertion (A).
The assertion says that Harappan people used to practice Yoga.
This is generally considered correct because some archaeological evidence, especially the Pashupati seal, suggests a seated posture similar to yogic posture.
Step 2: Check Reason (R).
The reason says that a large number of terracotta figurines depict individuals in various yogic postures.
This statement is not correct in the same way.
The main evidence usually discussed is the Pashupati seal, not a large number of terracotta figurines in various yogic postures.
Step 3: Final conclusion.
Assertion is correct, but Reason is incorrect.
Hence:
\[
\boxed{\text{(C)}}
\]