Dynamic DropDown Menu not showing the options to choose from.

Hello friends! Hope all is well!

The attachment here, has sheet called "DDDM", cell C2 has a dynamic dropdown menu that is not working. it is driving me crazy.
Please help me fix it.

thank you very much in advance!

In your validation you are using INDIRECT within your OFFSET which converts the cell reference to XYZ (for B2)
OFFSET requires a cell reference not a text string

In your Lists sheet you only have a single value against XYZ so would a VLOOKUP work for your Item column on DDDM sheet?

I'm not sure what you are trying to achieve here, so sorry if it's not a complete solution!