Step 1: Understanding the Concept
A colloid is classified by the physical state of its dispersed phase and its dispersion medium.
Step 2: Apply to the question
Here both the dispersed phase and the medium are liquids.
A liquid dispersed in a liquid is called an emulsion, for example milk.
Step 3: Compare the options
Gel is a liquid dispersed in a solid.
Foam is a gas dispersed in a liquid.
Aerosol is a liquid or solid dispersed in a gas.
Only the emulsion is liquid in liquid.
Final Answer:
A colloid with liquid in liquid is an emulsion, option (C).
\[ \boxed{\text{(C) }\text{an emulsion}} \]