Chile is not entirely in South America, Easter Island is in Oceania. Furthermore, Colombia has islands in North America.

Maybe rephrase as "country whose capital is in South America"?

If there where someone who lived 362 days of the year in 1 place when ever they got asked:
Where do you live? Their response will be: At that 1 place and not in the place where they sleep the 3 missing dates
France is an European Country, US North American and Chile is in fact a South American country by its own definition.

The question asks about countries "entirely in South America". Would you say Chile is "entirely in South America", yes or no?