The words mill, mil sound the same but have different meanings and spellings. Why do mill, mil sound the same even though they are completely different words?
The answer is simple: mill, mil are homophones of the English language.
A unit of length equal to one thousandth (10-3) of an inch (0.0254 millimeter), used, for example, to specify the diameter of wire or the thickness of materials sold in sheets.
A milliliter; one cubic centimeter.
A unit of angular measurement used in artillery and equal to 1/6400 of a complete revolution.
Slang A million dollars.
A building equipped with machinery for grinding grain into flour or meal.
A device or mechanism that grinds grain.
A machine or device that reduces a solid or coarse substance into pulp or minute grains by crushing, grinding, or pressing: a pepper mill.
A machine that releases the juice of fruits and vegetables by pressing or grinding: a cider mill.
Definitions from The American Heritage® Dictionary of the English Language, 4th Edition and Wordnik.
Homophones (literally "same sound") are usually defined as words that share the same pronunciation, regardless of how they are spelled.
If they are spelled the same then they are also homographs (and homonyms); if they are spelled differently then they are also heterographs (literally "different writing").