In an aqueous solution, KOH almost completely ionises to give OH– ions. OH– ions is a strong nucleophile, which leads the alkyl chloride to undergo a substitution reaction to form alcohol.
On the other hand, an alcoholic soln of KOH contains alkoxide (RO–) ion, which is a strong base. Thus, it can abstract a hydrogen from the β – 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 in an aqueous solution and as a result the basic character of OH’ ion decreases. Therefore, it cannot abstract a hydrogen from β - carbon.