Step 1: Concept
Solubility in water depends on the ability to form intermolecular hydrogen bonds with water.
Step 2: Hydrogen Bonding Analysis
- Phenol and p-Nitrophenol form strong intermolecular H-bonds with water.
- o-Nitrophenol undergoes **intramolecular** hydrogen bonding (chelation).
Step 3: Effect on Solubility
Because the $-OH$ group in o-nitrophenol is involved in an internal bond, it is less available to bond with water molecules.
Step 4: Conclusion
This makes o-nitrophenol the least soluble and most steam-volatile.
Final Answer:(C)