Wood is a natural composite material that is widely used in various applications due to its unique combination of strength, stiffness, and low density. It is composed of two main components: cellulose fibers and lignin matrix. The correct answer is option 'D', which states that wood consists of cellulose fibers in a lignin matrix.

Cellulose Fibers:
- Cellulose is the main structural component of wood, accounting for about 40-50% of its composition.
- It is a polysaccharide, meaning it is composed of long chains of glucose molecules.
- Cellulose fibers are elongated structures that provide strength and stiffness to wood.
- These fibers are aligned parallel to the longitudinal direction of the tree trunk, giving wood its anisotropic properties.

Lignin Matrix:
- Lignin is a complex polymer that fills the spaces between cellulose fibers in wood.
- It acts as a binding material, holding the cellulose fibers together and providing structural support.
- Lignin is responsible for the natural brown color of wood and its resistance to decay.
- It also contributes to the density and hardness of wood.

Composite Structure:
- In wood, the cellulose fibers are embedded in a lignin matrix, forming a composite structure.
- The cellulose fibers provide the tensile strength and stiffness, while the lignin matrix provides cohesion and support.
- This combination of cellulose fibers and lignin matrix gives wood its unique mechanical properties.

Significance of Wood as a Composite Material:
- The composite nature of wood gives it a high strength-to-weight ratio, making it suitable for various applications.
- The anisotropic properties of wood, with higher strength along the grain direction, allow it to be used in structural applications.
- Wood can be easily shaped, cut, and joined, making it a versatile material for construction and furniture.
- The natural fibers and matrix components in wood are renewable and biodegradable, making it an environmentally friendly material choice.

In conclusion, wood is a natural composite material consisting of cellulose fibers embedded in a lignin matrix. This composite structure gives wood its unique mechanical properties and makes it a valuable material in various industries.