Answer:
XYZ is about coordinates.
3D milling - three-dimensional milling allows you to cut material simultaneously in three coordinates (x, y, and z). That is, the spindle can move in 3 coordinates at the same time.
And 2.5D milling - happens layer by layer and is possible in synchronous mode, only on two axes.
In simple terms, 2D, 2.5D, 3D, 4D, 5D, etc. - is a characteristic of the CNC interpolator. it is when the spindle moves in X or Y, stops and then moves in Z.
