What matters is how power is exercised and checked.
Democracy requires more than government offices and a head of government. People must be able to advocate political alternatives, and power must be limited and subject to checks. The Nazis attacked and removed precisely these conditions.
The Reichstag Fire Decree of February 1933 suspended essential rights. The Enabling Act passed in March allowed the government to legislate without the usual parliamentary constraints. Arrests and intimidation were part of this development, not incidental features of an ordinary change of government.

The other three answers
The remaining terms do not describe the Nazi system established.
a democratic state.
A democratic state protects political participation, opposition and checks on power. Nazi rule removed these conditions.
a monarchy.
A monarchy has a monarch as head of state. Hitler did not restore royal rule; the question concerns the dictatorial organisation of power.
a principality.
A principality is a state ruled by a prince. The Nazis did not turn Germany into such a principality.
Dictatorship was established through several steps.
Hitler’s appointment on 30 January 1933 is an important starting point. Removing rights, stripping parliament of power and persecuting opponents followed in a process. The test summarises this development within 1933.
Putting measures into decrees or statutes did not make them democratic. Their effects on freedom, equality and limits on state power matter, as does the violence surrounding political decisions.
Enabling Act of 1933 · German Bundestag ↗1933: rights removed, opposition persecuted, dictatorship established.
Connect “dictatorship” with concrete features. This helps identify the answer even when a question is phrased differently.
Three words for this question
- die Diktaturdictatorship
- Rule without effective democratic checks and free political competition.
- errichtenestablish
- To create a system or institution.
- die Oppositionopposition
- Political forces that oppose the government and advocate alternatives.
