Step 1: Concept
The ABO blood group is determined by the $I$ gene, which has three different forms known as alleles: $I^A$, $I^B$, and $i$.
Step 2: Meaning
Multiple allelism occurs when more than two alleles govern the same character. Codominance occurs when two alleles are both expressed in the phenotype.
Step 3: Analysis
Alleles $I^A$ and $I^B$ are both completely dominant over $i$. However, when $I^A$ and $I^B$ are present together, they both express their own types of sugars; this is codominance. Because there are three alleles ($I^A$, $I^B$, $i$) involved, it is also an example of multiple alleles.
Step 4: Conclusion
Thus, the ABO system represents a combination of both multiple alleles and codominance.
Final Answer: (B)