Lactose comes from the Lain word for milk, plus the -ose ending used to name sugars and occurs generally in mammalian milk as follows:

Species Human Cow Sheep Goat   Lactose % 7.2%   4.5%   5.1% 4.4%

For humans to be able to digest lactose we need to produce lactase, an enzyme that is produced in our intestines, particularly when we are babies, but also into adulthood if we continue with a dairy diet. 

A number of people lose this ability and this leads to lactose intolerance; a condition where the lactose is not assimilated and passes into the colon where it ferments, giving rise to extreme discomfort.  However, most people who suffer from lactose intolerance are able to consume yoghurt as it has less lactose and some residual lactase; also the coagulum or curds may hold the lactose while it is digested.  

Lactose intolerance is measured by hydrogen in the breath and many studies show a significant reduction of hydrogen production with the consumption of yoghurt.