The correct option is "2 only" because a Constitutional Government is fundamentally designed to limit the powers of the state in order to protect individual liberties and rights. This is achieved through a framework of laws and principles that ensure that government authority cannot infringe upon the freedoms and rights of its citizens, thus maintaining a balance between state power and individual rights. In contrast, statement 1 is incorrect as it suggests that a constitutional government restricts individual liberty, which undermines the very essence of constitutionalism where the state's authority is bound by the rule of law to protect personal freedoms.