Step 1: Concept
The shape of a molecule is determined by the Valence Shell Electron Pair Repulsion (VSEPR) theory, considering both bonding and lone pairs of electrons.
Step 2: Meaning
Xenon ($Xe$) has 8 valence electrons. In $XeF_4$, it forms 4 bonds with Fluorine, leaving 4 electrons (2 lone pairs).
Step 3: Analysis
With 4 bonding pairs and 2 lone pairs, the steric number is 6, corresponding to an octahedral electron geometry. To minimize repulsion, the two lone pairs occupy opposite axial positions.
Step 4: Conclusion
The remaining 4 Fluorine atoms are arranged in a single plane around the central Xenon atom, resulting in a square planar molecular geometry.
Final Answer: (B)