The correct option is C Bacteria
'Simplest and smallest form of plant life, present in air, water and soil; essential to life but may cause disease' is Option C, 'Bacteria'. Option A 'Virus' is an extreme small organic material that causes diseases in animals, plants and humans. Option B 'Amoeba' is a very small organism that has only one cell. Option D 'Toxin' is a poisonous substance produced by bacteria and causes diseases.. Thus, options A, B and D are incorrect and the correct word for the given phrase is option C, Bacteria.