B. "Guys" are burned to celebrate the failure of the Gunpowder Plot.
The first sentence of the passage states that "Guy Fawkes Night is a holiday in England that celebrates the failure of the Gunpowder Plot." Later in the passage it says that on this night "Children make Guy Fawkes dummies out of old clothes...they burn the "Guys" and set off fireworks." The passage supports the statement that the "Guys" are burned in celebration of this failure. Option A is not correct because Guy Fawkes and his supporters definitely did not think King James I was a beloved ruler. Option C is not correct because there is nothing in the passage that says that Parliament was under attack after the Gunpowder Plot was discovered. Option D is also not correct because there is nothing in the passage that says who is responsible for actually beginning the holiday.