Dialog show how a character speaks so you can see the level of education and regional area where he or she lives.
It's prose.
dialog
Dialogue is what the character(s) is/are saying.
Your question is a format question. Your publisher will advise you about how dialog is best presented in fiction. Preserving the script format for dialog in a fiction story may be too wasteful of space.
It depends on what sort of book you're writing. There can be dialogue if it's a fiction book. A nonfiction book usually does not contain dialogue.
insert a dialog choice a couple times into the dialog
Dialogue is essential in fiction because without it, you've got a dull, boring story. You can learn all about characters through the way they speak.
how to make a short dialog
dialog
Dialog Semiconductor was created in 1981.
The population of Dialog Semiconductor is 2,010.
Dialog Semiconductor's population is 400.