**Core Concept**
Chronic inflammation is a long-standing inflammatory response that can lead to tissue damage and fibrosis. It is characterized by the activation of immune cells, the release of pro-inflammatory cytokines, and the deposition of extracellular matrix. The signs of chronic inflammation are often subtle and may not be immediately apparent.

**Why the Correct Answer is Right**
The correct answer is **granulation tissue**, which is a hallmark of chronic inflammation. Granulation tissue is formed when fibroblasts and new blood vessels invade the inflamed area, leading to the deposition of collagen and the formation of a granular texture. This process is mediated by the release of growth factors, such as vascular endothelial growth factor (VEGF), which promotes angiogenesis and tissue repair. The presence of granulation tissue is a sign of the body's attempt to heal and repair damaged tissue.

**Why Each Wrong Option is Incorrect**
**Option A:** Sausage skin appearance (peau d'orange) is more associated with acute inflammation and lymphedema.
**Option B:** Fat necrosis is a feature of acute pancreatitis, not chronic inflammation.
**Option C:** Abscess formation is a sign of acute inflammation, not chronic.

**Clinical Pearl / High-Yield Fact**
Remember that chronic inflammation can lead to tissue fibrosis and scarring, which can have long-term consequences for the affected organ or system. For example, chronic inflammation in the lungs can lead to pulmonary fibrosis, a condition characterized by scarring and thickening of the lung tissue.

**Correct Answer:** C.