Originally Answered: Accused of plagiarism?
This does sound like a bit of a raw deal. If it were me, I think I would ask for further clarification on the grade -- the C grade might reflect more than just the small error you mentioned. Maybe your handling of the topic did not justify a higher grade or maybe the writing overall had some problems. Maybe the instructor just has very high standards for B and A grades. I would think your instructor would mention the reasons for the C in the notes she left on the paper, but maybe not. So, I would ask for clarification and I would ask her to definitively state that you were not suspected or accused of any plagiarism. If the justification for the lower grade was that "possible" plagiarism issue, but you have been cleared of that, then I would ask for another grade.
I might also compare notes with other students in the class. It'll be awkward to ask others about their grades, but if you can, ask some of the other students if they felt the grading of their papers was overly harsh or if they satisfied with their grades. If your research shows that most of your peers got Bs and As for similar work, this might reinforce your case.
If the instructor is inflexible on the point, then I would take it up with your academic adviser and maybe the dean or head of the department. It would be most appropriate to appeal the matter to the instructor's immediate supervisor and it would be courteous to inform the instructor that you are doing so. Try not to get angry or make it personal. Be polite and reasonable at all times. Again, this is awkward because it can make you sound like a complainer, but as I said -- it sounds like you may have been mistreated because some plagiarism program flagged your work.
It's very important that you understand why you are doing this -- it is not necessarily to get a better grade, but to ensure that your grade was fair. If it comes out that the instructor sincerely believes that you deserved the C, accept it. It is only one assignment in one class, and it is not worth wasting too much time or getting a bad reputation over this.
I wish you well!