Step 1: Use of Polar to Cartesian conversion formula.
The formula for converting polar coordinates \( (r, \theta) \) to Cartesian coordinates \( (x, y) \) is:
\[
x = r \cos \theta \quad \text{and} \quad y = r \sin \theta
\]
Given \( r = \frac{1}{2} \) and \( \theta = 120^\circ \), we compute:
\[
x = \frac{1}{2} \cos 120^\circ = \frac{1}{2} \times \left( -\frac{1}{2} \right) = -\frac{1}{4}
\]
\[
y = \frac{1}{2} \sin 120^\circ = \frac{1}{2} \times \frac{\sqrt{3}}{2} = \frac{\sqrt{3}}{4}
\]
Step 2: Conclusion.
Thus, the Cartesian coordinates are \( \left( -\frac{1}{4}, \frac{\sqrt{3}}{4} \right) \), which corresponds to option (D).