User blog comment:IamJakuhoRaikoben/Chapter 500: Fire and Ice, Review./@comment-24277053-20160906170328/@comment-7418318-20160906172928

A and B might be possible, but I seriously doubt C.

August seemed to be a father figure to Brandish. If she had grown up with Dimaria's family after the death of her own mother, it'd be rather unlikely for Brandish to have such a relationship with August.

I actually like a variation on the orphanage theory. Instead of a normal orphanage, it would be a combination of orphanage and training camp where children with great magical potential are taken in and trained (and likely also indoctrinated) as future soldiers for the Alvarez Empire.

Dimaria might also have a history of a family of priests to Chronos, but that family was wiped out by Zeref's forces in the course of uniting the continent under his banner and the very young Dimaria was then sent to the aforementioned institution, probably shortly after she had become linked with the god.