Step 1: Formula
A function is increasing where $f'(x) > 0$.
Step 2: Analysis
- $f(x) = (x^2 - 2x)^2$.
- $f'(x) = 2(x^2 - 2x)(2x - 2) = 4x(x-2)(x-1)$.
Step 3: Calculation
- Critical points: $x = 0, 1, 2$.
- Interval test:
- $(-\infty, 0) \implies (-)(-)(-) = (-)$
- $(0, 1) \implies (+)(-)(-) = (+)$
- $(1, 2) \implies (+)(+)(-) = (-)$
- $(2, \infty) \implies (+)(+)(+) = (+)$
Step 4: Conclusion
Function increases on $(0, 1) \cup (2, \infty)$.
Final Answer: (D)