Step 1: Concept
Molecules or ions having no unpaired electrons are diamagnetic.
Step 2: Analysis
For $Li_{2}$ (6 electrons), the configuration is $\sigma 1s^{2}, \sigma^{*} 1s^{2}, \sigma 2s^{2}$.
Step 3: Conclusion
Since all electrons are paired, it is diamagnetic.
Final Answer: (C)