oil-in-water emulsion
Milk is the everyday example: tiny droplets of fat (oil) suspended throughout water. An oil-in-water emulsion, written o/w, is built the same way — oil is the dispersed phase, broken into droplets, and water is the continuous phase surrounding them.
Because the outside of the product is water, an o/w emulsion feels watery, non-greasy, washes off easily, and can be diluted with water. This makes it the usual choice for oral emulsions (the oily drug is hidden inside droplets so the patient mostly tastes the pleasant aqueous outside) and for vanishing creams and lotions that should not leave a greasy residue.
Whether you get o/w rather than water-in-oil is governed largely by the emulsifier. Emulsifying agents with a high hydrophilic-lipophilic balance (HLB roughly 8 to 18), such as polysorbates, sodium lauryl sulfate, or acacia, favour o/w emulsions. A quick check at the bench: an o/w emulsion mixes freely when diluted with water and conducts electricity (because its continuous water phase carries ions).
A handy mnemonic for choosing emulsifiers is Bancroft's rule: the phase in which the emulsifier is more soluble tends to become the continuous phase, so a water-soluble (high-HLB) emulsifier gives an o/w emulsion.