\begin{itemize}
\item The Amara-Nayaka system was a major political innovation of the Vijayanagara Empire.
\item Nayakas were military chiefs who were given control over territories (called amaram) and enjoyed considerable autonomy in administration.
\item They collected taxes, maintained law and order, and even funded public works like temples and irrigation.
\item Therefore, statement (2) is incorrect as it falsely claims they had no control over their territories.
\end{itemize}