The correct answer is D, 'Loosely couple components.' This principle is crucial in cloud architecture as it allows for the isolation of failures between dependent components, thereby enhancing the fault tolerance and resilience of the system. When components are loosely coupled, a failure in one component does not cause a cascading failure in others, allowing the system to continue operating or to degrade gracefully. This is achieved by using well-defined interfaces, decoupling communication mechanisms, and employing distributed system patterns such as message queues, event-driven architectures, and microservices.