The correct option is D on and inside an ellipse
we know that equation
|z−z0|+|z−z1|=c
is the equation of an ellipse with z0 & z1 as focii
here |z+i|+|z−i|=4 is an equation of ellipse with (0,1) & (0,-1) as the focii the 'less than' sign represent all the points inside ellipse