We are low on population as it is, wasting the council along with the other guys taking up arms looks like a rather futile gesture, even if you're aiming to spread the seeds of rebellion later.
Given that the people are already doing all three options, and that we're just choosing what the council should do, it makes more sense for the rebel side with A. They're already going to have a massacre happen, whichever option we choose, but if we stick with A then the council (probably the most bitter group about the whole thing) will actually be able to survive to maybe stir up something off in the future, as they're about the only alternate authority fielder to the Wielder. They can spread indignity about some of our tribe members being massacred in this event.
With B, none of that happens. They're dead along with everyone else who opposed the Wielder, there's no legitimate body of authorities left other than the Wielder, and while it may have been more honorable for them, they probably won't be remembered in glowing terms. Supporters of the Wielder would be more likely to urinate on their ashes for making the Wielder waste time shoveling shit when he could have been teaching them to throw awesome fireballs, and the majority of the folks who lack that view would be, as you recall, dead. The Wielder has plenty grievances of his own to be avenged against the council, and his supporters are naturally more likely to latch onto his views than those of his detractors, though I don't deny that a few would probably resent him over this.
I want more information about this direction, so I'm going with A to leave our options open for the future. When the people have been taught magic and maybe have enough power to begin to think of opposing the Wielder, the council or whoever they've spread the tales of broken promises and such to can start putting up dissent later and force a change in government if the current fire theocracy starts to look too dodgy for me to support. Going with B, there's no 'eject button', we just have to deal with the fire theocracy. Which is fine too, I guess, we'd be a little more internally stable with a purge right at the start so I guess that could make us stronger in maybe morale and dedication to the cause, but I don't want this to both deprive us of more manpower than it needs to and kill off some of what could be the most able people to take down the Wielder's regime if that becomes necessary.