**Core Concept**
Hydatid disease, also known as echinococcosis, is a parasitic infection caused by the Echinococcus tapeworm. The life cycle of this parasite involves two hosts: an intermediate host where the larval stage develops, and a definitive host where the adult worm resides.

**Why the Correct Answer is Right**
The intermediate host for hydatid disease is typically a herbivore or an omnivore, where the larval stage of the Echinococcus tapeworm develops into a cyst. This cyst, also known as a hydatid cyst, can form in various organs, including the liver, lungs, and kidneys. The most common intermediate host is the sheep, but other animals like goats, cattle, and rodents can also serve as intermediate hosts.

**Why Each Wrong Option is Incorrect**
**Option A:** Humans are not typically considered intermediate hosts for hydatid disease, although they can be accidental hosts where the parasite completes its life cycle.
**Option B:** Dogs are definitive hosts for Echinococcus tapeworms, not intermediate hosts.
**Option C:** Cats can also be definitive hosts for Echinococcus tapeworms, but are not intermediate hosts.

**Clinical Pearl / High-Yield Fact**
It's essential to recognize that hydatid disease can manifest in various organs, and the location of the cyst can influence the clinical presentation and diagnostic approach.

**Correct Answer: D. Sheep.