You can observe dispersion in a water droplet most clearly in the form of a rainbow. Here’s how it happens:
When sunlight enters a water droplet in the atmosphere, it undergoes refraction (bending) at the surface of the droplet. Inside the droplet, the light reflects off the inner surface and then exits through the other side. During both refraction events—entering and exiting—the different wavelengths of light bend by different amounts because of dispersion.
Shorter wavelengths like blue and violet bend more than longer wavelengths like red. This separation of colors causes the white sunlight to spread into a spectrum inside the droplet. When this light exits the droplet and reaches your eye, you see the separated colors arranged in a circular arc—what we call a rainbow.
The angle between the incoming sunlight and the refracted, dispersed light is specific for each color. This angle difference makes each color appear at a slightly different position in the sky, forming the rainbow’s distinct color bands.
So, by looking at a rainbow after rain, you are directly observing dispersion occurring in millions of tiny water droplets in the air.