Step 1: Understand what a mad dog bite means.
A mad dog is a dog infected with the rabies virus. This virus lives in the saliva of the infected animal and enters the body through a bite or a scratch.
Step 2: Recall the disease caused.
The rabies virus attacks the nervous system and causes a disease called hydrophobia, also known as rabies. The name hydrophobia means fear of water, because an infected person develops painful throat spasms at the sight or thought of water.
Step 3: Rule out the other options.
(A) Hydrocele: This is a swelling in the scrotum caused by fluid collecting around the testicle. It has nothing to do with a dog bite. Incorrect.
(C) Hydrocephalus: This is a build up of fluid inside the cavities of the brain, usually present from birth or caused by injury or infection of the brain, not by a dog bite. Incorrect.
(D) Hydroperitoneum: This means fluid collecting in the abdominal cavity, commonly called ascites, and is linked to liver or kidney disease, not to a dog bite. Incorrect.
Step 4: Final answer.
The bite of a mad dog causes hydrophobia (rabies), a fatal viral disease of the nervous system if not treated in time with vaccination.
\[ \boxed{\text{Hydrophobia (Rabies)}} \]