The correct option is
A Thought
The given passage is a narration of a story that has already happened. Hence, it's in the past tense.
The action in the sentence would be in the past.
Options B and C: 'Thought' is a past tense verb that describes the action done by the villagers: they thought he was in danger.
'Think' is the base verb and does not express the past tense.
Hence option C is correct and B is incorrect.
Option A: 'Considered' means 'thought about or decided with care'. This verb is used when some conundrum comes to mind. That is when you consider. 'Thought' is a relatively short action and that is what happened in the story. In case of an immediate danger 'the wolf', there was no time 'to consider'. Hence option A is incorrect.
Option D: Similarly, 'regarded' means 'look upon or think of with a particular feeling.
This meaning isn't suitable here, and hence option D is also wrong.