Milk is a colloid in which liquid is dispersed in a liquid. A colloid is a mixture in which particles of one substance are dispersed throughout another substance, but do not settle out. In the case of milk, tiny droplets of fat are dispersed throughout the water-based solution.

Explanation:
1. Definition of a colloid:
- A colloid is a type of mixture where tiny particles of one substance are evenly distributed throughout another substance.
- The particles in a colloid are larger than individual molecules but smaller than the particles in a suspension.

2. Milk as a colloid:
- Milk is an example of a colloid because it consists of tiny fat droplets dispersed throughout a water-based solution.
- The fat droplets in milk are called colloidal particles.
- These fat droplets are not easily visible to the naked eye, but they give milk its characteristic opaque appearance.

3. Liquid dispersed in a liquid:
- In the case of milk, liquid (fat) is dispersed in another liquid (water).
- The fat droplets are evenly distributed throughout the water-based solution, creating a stable colloid.
- If left undisturbed, the fat droplets will not settle out but remain suspended in the liquid.

4. Other options explained:
a) Solid dispersed in a liquid: This option is not correct because milk does not contain solid particles dispersed in a liquid. Although milk contains other components like proteins and minerals, they are dissolved in the liquid portion of milk and do not form solid particles.
c) Sugar dispersed in liquid: This option is not correct because although milk contains lactose, which is a type of sugar, it is dissolved in the liquid portion of milk and does not form separate sugar particles dispersed throughout.
d) Gas dispersed in a liquid: This option is not correct because milk does not contain gas particles dispersed in a liquid. Milk is a liquid and does not have a significant amount of gas bubbles present.

In conclusion, milk is a colloid in which liquid (fat) is dispersed in another liquid (water). The fat droplets give milk its characteristic appearance and create a stable colloid.