CAPTION: Pictures 1 through 4, Milan, Italy, more than any other city in the world, has a population who appreciates and understands design. This love for what is visually exciting carries over to the way Milanese women choose to dress. No little rayon dresses with demure collars, boring suits or safe sweaters for this crowd. Photographs taken on the streets there last month offer a glimpse at women who have created strong, effective looks of their own. These women show a feeling for fabric, color and shape: A bright tie and big buttoned sweater over deep black pants and shirt are carried off as feminine; A short, tight knit turquoise dress has been accented with a wide belt and a short-crop bulky jacket for an understated and elegant look; Fingerless gloves are paired with an oversize lightweight raincoat on a sunny day; To a gray outfit with many folds of fabric, bright blue boots in rich leather have been added along with an elongated bag and print shirt. In Milan women have learned they do not have to follow the dictates of fashion. Instead, they have thought carefully about the bigger ideas presented by designers like Fendi, Versace and Missoni and mixed them with their own selections of clothes and accessories they like and with which they feel familiar. PHOTOGRAPHS BY ROBIN LAURANCE