To avoid boundary disputes between two states, it is most important for those two states to come to a clear agreement about the boundary’s location during which step of boundary creation?

definition
delimitation
demarcation
administration

The correct answer is - Demarcation.

The demarcation process is a process in which the boundaries are marked with physical objects, and it is a process agreed by both sides. In order for the two countries to avoid a dispute over their boundary, it is the best if there's a consensus from both sides about the border line. It may be even a slight change in border, by one of the states losing little territory on one side, and the other one losing on other side, which usually occurs in accordance to the ethnic groups distribution and the places where they live so that problems are avoided. Also, very often, the easiest way to avoid dispute is to use the natural landmarks, and to use them as a border line,thus make the process of demarcation even easier and more efficient.

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explanation; google