What is the key component allowing the Jeep Cherokee to be flat-towed?

The key component that allows the Jeep Cherokee to be flat-towed is the two-speed Power Transfer Unit (PTU) with a NEUTRAL shift position. This feature is essential for flat towing because it enables the vehicle's drive components to be disconnected from the wheels, allowing them to spin freely without causing damage to the transmission or the driveline. When the PTU is shifted to the NEUTRAL position, the drive mechanism is disengaged, preventing any wear or strain on the drivetrain while being towed.

In contrast, other options do not provide the necessary configuration for safe flat towing. For instance, a single-speed transfer case lacks the required NEUTRAL position functionality, which is critical for towing. Similarly, the rear differential lock and all-wheel drive transmission do not address the need for disengaging the vehicle's drivetrain. These components serve different purposes and do not facilitate the safe towing of the vehicle with all wheels on the ground. The design of the two-speed PTU specifically supports the needs of flat towing, making it the correct answer in this context.