The correct answer is D. their. Given that the castles are plural (meaning there is more than one castle), you need to use the plural pronoun as well, and their is the only plural pronoun among these options, so you don't really have other choice. If the noun was singular (the castle), then you would use its (never his or hers because castles are not male or female).
Forking rivers or paths are commonly used to express a character's opposing features in literature. In this case, it represents Nikolai's two sides - stern and caring. The river merges into one at the end - implying that his two sides can coexist.