Peptization is the method of producing stable colloids using an electrolyte to split up and distribute a precipitate into the colloids. Peptization utilizes the charges to produce colloids from the precipitate. The electrolyte used in the process is called a peptizing agent.
Example: When the ferric chloride is added to the precipitate of ferric hydroxide, the hydroxide precipitate transfer to the sol by absorbing ferric ions. In simple words, Fe3+ is absorbed on Fe(OH)3 and splits into colloids.