日本の地方では、人口が減りつつある町が増えている。
Q. What does 減りつつある describe?
Translation
In rural Japan, more and more towns have populations that are steadily shrinking.
Explanation
〜つつある expresses a gradual change in progress: 減りつつある 'is (in the process of) decreasing'. It is ongoing — not completed (A) and not hypothetical (C).