The Collaborative International Dictionary of English v.0.48:

Posset \Pos"set\, n. [W. posel curdled milk, posset.]
   A beverage composed of hot milk curdled by some strong
   infusion, as by wine, etc., -- much in favor formerly. "I
   have drugged their posset." --Shak.
   [1913 Webster]

The Collaborative International Dictionary of English v.0.48:

Posset \Pos"set\, v. t. [imp. & p. p. Posseted; p. pr. & vb.
   n. Posseting.]
   1. To curdle; to turn, as milk; to coagulate; as, to posset
      the blood. [Obs.] --Shak.
      [1913 Webster]

   2. To treat with possets; to pamper. [R.] "She was cosseted
      and posseted." --O. W. Holmes.
      [1913 Webster]

WordNet (r) 3.0 (2006):

posset
    n 1: sweet spiced hot milk curdled with ale or beer