In 1947 suppose that, instead of attempting to draw a fair line between Muslims and non-Muslims, British India has a referendum asking each village, “With which of your neighbors (including native states) would you merge?” Do the most favored mergers (skipping those that would create enclaves), and ask again ... until no further mergers are approved. (Increase the threshold of approval at each step.)
The disadvantage is that some ambitious parties paint the process as a last effort to keep India divided and weak.
The advantage, as I see it, is that the people decide by their own criteria how to divide themselves, which may be on religious or ethnic lines, or not; I suspect links of commerce often outweigh such differences, but that's my own ignorance and bias talking. In any case, fewer refugees!
The immediate result is, let's say, twenty to a hundred post-British states. Of the many native states, some have grown, and some are quickly seized by their bigger new neighbors.
What happens next? What does India look like thirty years later, assuming no British (or Chinese or ...) interference?
(Prompted by this question about the Sepoy Rebellion.)