Lactose is present in dairy products. When lactose is ingested by a person lacking lactase (an enzyme which breakdown lactose), it causes diarrhoea, bloating and tummy cramps.
Lactase is usually secreted in the small intestines to breakdown lactose. A deficiency of this enzyme is what causes a person to become lactose intolerant.
Levels of intolerance varies from person to person. The amount they can tolerate can be increased by giving milk or dairy products little and often. Thicker foods like curds and yogurts are better tolerated because they move through a bowel at slower rate.