Coalition government refers to a form of government in which two or more political parties come together to form a governing alliance. In such a government, power is shared by these political parties, and each party has a say in decision-making and policy formulation. The correct statement about coalition government is option 'D', which states that power is shared by two or more political parties. Let's explore this statement further.

Explanation:
1. Introduction to Coalition Government:
- Definition: A coalition government is a form of government where multiple political parties join together to form a governing alliance.
- Purpose: Coalition governments are often formed when no single party gains a majority in an election, and it becomes necessary to create a coalition to achieve a working majority.

2. Power Sharing:
- In a coalition government, power is shared by two or more political parties.
- Each party has a certain degree of influence and decision-making power, allowing them to represent their interests and policies.

3. Decision-Making Process:
- Key decisions are made through consultations and negotiations among the coalition partners.
- Parties often have to compromise and find common ground to reach consensus on important issues.
- This ensures that the interests of multiple parties are considered and represented in the decision-making process.

4. Policy Formulation:
- Policies are formulated through discussions and agreements between the coalition partners.
- Each party contributes its ideas and priorities, leading to a more diverse and inclusive policy framework.
- The coalition partners work together to develop policies that reflect the interests and concerns of the different parties involved.

5. Stability and Governance:
- Coalition governments can provide stability and continuity in governance.
- By sharing power, parties are motivated to work together and maintain the coalition to achieve their common goals.
- However, the stability of a coalition government depends on the ability of the parties to maintain consensus and manage their differences effectively.

Conclusion:
In summary, the correct statement about coalition government is that power is shared by two or more political parties. Coalition governments are formed to ensure representation of different parties and to create a more inclusive decision-making process. By sharing power, coalition partners can work together to formulate policies and provide stable governance.