Dottie:

The "food colouring test" is where you put some food colouring into the water in the toilet tank to change it's colour.

If water is leaking from the toilet tank into the bowl, then the water in the bowl will soon start to have that same colour to it.

The idea here is just to prove that water is leaking from the tank into the bowl. I think that's pretty well already established, but it just confirms that the water isn't leaking out anywhere else, such as onto your bathroom floor.