Step 1: Concept Differentiability at $x=0$ requires $\lim_{h\to0} \frac{f(h)-f(0)}{h}$ to exist and be finite.
Step 2: Meaning Substituting the function: $\lim_{h\to0} \frac{h^p \cos(1/h) - 0}{h} = \lim_{h\to0} h^{p-1} \cos(1/h)$.
Step 3: Analysis For this limit to be 0 (and exist), the power of $h$ must be positive. Therefore, $p - 1 > 0$.
Step 4: Conclusion Solving the inequality gives $p > 1$.
Final Answer: (C)