Answer: C
\[ \cos^2\theta - \sin^2\theta = \frac{1}{2} \\ \Rightarrow 2\cos^2\theta - 2\sin^2\theta = 1 \\ \Rightarrow 2\cos^2\theta - 2\sin^2\theta = \sin^2\theta + \cos^2\theta \\ \Rightarrow 2\cos^2\theta - \cos^2\theta = \sin^2\theta + 2\sin^2\theta \\ \Rightarrow \cos^2\theta = 3\sin^2\theta \\ \Rightarrow 3\sin^2\theta = \cos^2\theta \\ \Rightarrow \frac{\sin^2\theta}{\cos^2\theta} = \frac{1}{3} \\ \Rightarrow \tan^2\theta = \frac{1}{3} \\ \Rightarrow \tan\theta = \frac{1}{\sqrt{3}} \]
\[ \cos^2\theta - \sin^2\theta = \frac{1}{2} \\ \Rightarrow 2\cos^2\theta - 2\sin^2\theta = 1 \\ \Rightarrow 2\cos^2\theta - 2\sin^2\theta = \sin^2\theta + \cos^2\theta \\ \Rightarrow 2\cos^2\theta - \cos^2\theta = \sin^2\theta + 2\sin^2\theta \\ \Rightarrow \cos^2\theta = 3\sin^2\theta \\ \Rightarrow 3\sin^2\theta = \cos^2\theta \\ \Rightarrow \frac{\sin^2\theta}{\cos^2\theta} = \frac{1}{3} \\ \Rightarrow \tan^2\theta = \frac{1}{3} \\ \Rightarrow \tan\theta = \frac{1}{\sqrt{3}} \]