The Milky Way was a galaxy that contained Earth and its solar system. It also contained the Uncharted Territories and the realms of the Scarran Empire.
When John Crichton arrived aboard Moya after his wormhole travel, one of the first things he asked was whether he was still in Orion's Arm in the Milky Way. ("Premiere")
Not long after, Crichton still had hopes of finding his location in the Milky Way when Moya's crew landed on Denea and asked Lyneea for star charts to that end. ("I, E.T.")
Scorpius devoted the considerable resources available to his research project to cross-referencing the stellar information which was in Crichton's mind (that he obtained from the neural chip) of all stars known to Earth scientists, with the stellar cartography known to the Peacekeepers. After exhaustive research, Scorpius was able to identify the location of Earth relative to Peacekeeper space, and they are both indeed located within the Milky Way Galaxy. Scorpius explained that even using advanced Peacekeeper faster-than-light travel, at the current technological level in the Uncharted Territories, it would take a Peacekeeper Command Carrier about 60 cycles to travel to Earth. ("Into the Lion's Den - Lambs to the Slaughter")
