The phenomenon where objects beyond the campfire appear to sway or shimmer is due to the refraction of light. Refraction occurs when light passes through layers of air at different temperatures, which causes the light to bend. The heated air near the fire has a different refractive index than the cooler air around it, creating the illusion of movement or swaying of distant objects. Reflection occurs when light bounces off surfaces, while total internal reflection and dispersion relate to different optical phenomena that do not explain this particular effect. Thus, the correct answer is refraction.
The correct option is (A): refraction