The portion "...and drinks its scant rain" does not contain an error. It is correct because it is part of a list of things the subject "the country of three seasons" performs, accordind to grandfather's explanation. <em>The use of a comma before </em><em>"and"</em><em> helps the reader understand that the last item is independent of the other items of the list.</em>
I'd say the correct answer is B, because 'in the desert is part of the subject/noun 'canyon', and modifies it, that is, refers to it, describes it in more detail.
