Step 1: Understanding the Concept:
Rancidity is the spoiling of fats and oils. In oxidative rancidity, oxygen from air attacks unsaturated fatty acid chains.
Step 2: Detailed Explanation:
The process starts when a hydrogen next to a double bond is removed to form a free radical. The radical reacts with \(\text{O}_2\) to give a peroxy radical, and that takes a hydrogen from another molecule to continue the chain. Steps are initiation, propagation and termination.
So it is a free radical chain reaction. It is not a simple addition, substitution or displacement reaction.
Step 3: Final Answer:
Option (C), free radical chain reaction.
Final Answer:
Oxidative rancidity is a free radical chain reaction.
\[ \boxed{\text{(C) }\text{free radical chain reaction}} \]