Step 1: Understanding urbanization concept.
Urbanization refers to the percentage of the population living in urban areas (cities and towns) compared to rural areas. The Census of India 2011 provides detailed data on the level of urbanization across states.
Step 2: Most urbanized states as per 2011 census.
- The most urbanized state in India (excluding Union Territories) was Tamil Nadu, with around 48.4% of its population living in urban areas.
- The second most urbanized state was Kerala, with about 47.7% urban population.
- Other states such as Gujarat (42.6%), Punjab (37.5%), and Mizoram (around 52% but with a small population base and counted differently in census classification) had lower rankings when considering the larger states.
Step 3: Elimination of options.
- (B) Mizoram: Though it has a high urbanization percentage, it is a small northeastern state and not counted in the “large state” category for urbanization ranking.
- (C) Gujarat: Around 42.6%, lower than Kerala.
- (D) Tamil Nadu: Correctly the first, not the second.
- (E) Punjab: Only about 37.5%, much lower.
Thus, the correct answer is (A) Kerala.
\[
\boxed{\text{Kerala is the second most urbanized state in India (2011 census).}}
\]