The Right Answer

You want to use Math Strategy for this 1-blanker. The phrase "in that" indicates that the two ideas support each other. Looking to the right of that phrase, we see that "dramatic literature takes as its subject matter the important events..." We want to repeat, or at least go along with, this idea in the blank. So I would guess a word like "uses," "takes in," or "talks about."

The best match for these guesses is recapitulates.

The Wrong Answers

confounds: This choice has no evidence. There is no evidence that the history is either being confused or clarified.
repudiates: This choice contradicts the logic of the sentence. Dramatic literature is "taking in" the subject matter, not rejecting it.
anticipates: This choice is wrong from a usage point of view. How can you "anticipate" the HISTORY of something?
polarizes: This choice is wrong from a usage point of view. What does it mean to "polarize" a history? Makes no sense.