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Sentence Correction: Tenses - Past Simple and Progressive

While Shamanism, a system of religious practices and beliefs involving individuals who communicate with the spirit world and cure disease, has been documented all over the world, the term has been derived from Siberian tribal culture, in which the human intermediaries were known as Shamans.

Incorrect.

This answer choice is grammatically incorrect. The Present Perfect verb has been derived is used to describe an action that occurred in the past (the derivation of the term Shamanism occurred in the past, but is already in established usage in English, and does not continue to be derived in the present).

Incorrect.

While this answer choice corrects the tense mistake in the original question, it is stylistically flawed. Using two opposition conjunctions when referring to the same relation is redundant.  Double conjunctions is one of the specific redundancies that should always be eliminated.

Stop Sign: Though/Although/Even though/Despite/In spite of... later followed by  but/yet/however/still/nevertheless

Incorrect.

This answer choice repeats the tense mistake in the original question: it uses the Present Perfect has been derived to describe something that occurred in the past. The derivation of the term Shamanism occurred in the past, but is already in established usage in English, and does not continue to be derived in the present.

In addition, this answer choice incorrectly places a comma before the defining relative pronoun who. The information in the relative clause who communicate with the spirit world and cure disease is crucial for understanding the meaning of the sentence - if this information were left out the sentence would not make sense. The relative clause defines precisely what type of individuals are involved in Shamanistic religion.

Incorrect.

This answer choice is grammatically incorrect. It uses the Past Progressive (was being derived) to describe an action that occurred in the past and ended (the deriving of the term Shamanism), but this tense is used to describe continuous actions in the past.

In addition, the dangling modifier Documented all over the world, at the beginning of the sentence describes what immediately follows it - the term Shamanism - but the term Shamanism has not been documented all over the world - the religious system Shamanism has. 

What helps us identify this question as a Dangling Modifier question as well as identify the mistake is the following Stop Sign:

A modifier, characterized by all of the following:
1. Verb+ing or Verb in 3rd form
2. Separated from the rest of the sentence by a comma
3. Appears at the very beginning of the sentence

Whenever you see this Stop Sign, focus on the modifier: check whether the noun right after the modifier is indeed the noun that the modifier describes. If it isn't - you've found your mistake.

Excellent work!

This answer choice corrects the tense mistake in the original question, by changing the Present Perfect tense (has been derived) to the Past Simple (was derived).

While Shamanism, a system of religious practices and beliefs involving individuals who communicate with the spirit world and cure disease, has been documented all over the world, the term has been derived from Siberian tribal culture, in which the human intermediaries were known as Shamans.
While Shamanism, a system of religious practices and beliefs involving individuals who communicate with the spirit world and cure disease, has been documented all over the world, the term was derived from Siberian tribal culture, in which the human intermediaries were known as Shamans.
Even though religious practices and beliefs involving individuals that communicate with the spirit world and cure disease have been documented all over the world, but the term Shamanism was derived from Siberian tribal culture, in which the human intermediaries were known as Shamans.
Although the term Shamanism has been derived from Siberian tribal culture, in which the human intermediaries were known as Shamans, religious practices and beliefs involving individuals, who communicate with the spirit world and cure disease, are documented all over the world
Documented all over the world, the term Shamanism, referring to a system of religious practices and belief that involves individuals communicating with the spirit world and curing disease, was being derived from the tribal culture of Siberia, where the human intermediaries were known as Shamans.