**Core Concept**
Intrauterine death (IUD) in a pregnant woman can be diagnosed using various radiological signs on X-ray. The diagnosis is often challenging, especially in early gestation. The presence of gas within the fetal vessels is a key indicator of IUD, as it signifies the breakdown of fetal tissues.

**Why the Correct Answer is Right**
The correct answer, **D. Gas in vessels**, is the earliest demonstrated sign of IUD on X-ray. This occurs due to the breakdown of red blood cells within the fetal circulation, leading to the formation of gas bubbles. This process is often accompanied by the release of gas into the fetal vessels, which can be visualized on X-ray. The presence of gas in the vessels is a critical indicator of IUD, as it suggests that the fetus has been deceased for a sufficient period to allow for tissue breakdown.

**Why Each Wrong Option is Incorrect**
* **Option A:** Increased flexion is a sign of fetal maceration, which occurs after IUD. It is not an early indicator of IUD.
* **Option B:** Overlapping of cranial bones is a sign of fetal skull compression, which can occur due to various reasons, including IUD. However, it is not the earliest demonstrated sign of IUD on X-ray.
* **Option C:** Spalding's sign refers to the overlapping of the frontal bones, which is a sign of fetal maceration. It is not an early indicator of IUD.

**Clinical Pearl / High-Yield Fact**
It is essential to note that the diagnosis of IUD is often challenging, and a high index of suspicion is required. The presence of gas in the vessels is a critical indicator of IUD, and it should be considered in cases where there is a discrepancy between the clinical presentation and the ultrasound findings.

✓ Correct Answer: D. Gas in vessels