an aqueous solution, KOH almost completely ionizes to give OH-ions. OH- ion is a strong nucleophile(see the imp. note below), which leads the alkyl chloride to undergo a nucleophilic substitution reaction to form alcohol.

On the other hand, an alcoholic solution of KOH contains alkoxide (RO-) ion, it is a strong base. Thus, it can abstract a hydrogen ion from the beta-carbon of the alkyl chloride and form an alkene by eliminating a molecule of HCl.OH- ion is a much weaker base than RO- ion. Also, OH- ion is highly solvated (because more energy is released on solvation)in an aqueous solution and as a result, the basic character of OH-ion decreases.

Therefore, it cannot abstract a hydrogen from the beta -carbon.

The concept used hydroxide ion is a strong nucleophile but weaker base than -OR group.