Neither shall they say, Lo here! or, lo there! for, behold, the kingdom of God is within you.
Note 1 at Lu 17:21: Jesus was speaking directly to the Pharisees, and it is certain that the kingdom of God was not inside of them (Joh 3:3). There are at least two good ways of explaining this.
First, many Bibles, in the margin, have substituted "in the midst of you" for the phrase "within you." This is because the Greek word "ENTOS," which was translated "within," can denote either "within or among" (Vine's Expository Dictionary). The only other time this word ENTOS is used in the New Testament is in Mt 23:26, in which case the meaning "within" is clearly correct. However, most scholars believe that this verse should be interpreted as "the kingdom of God is in the midst of you."
If this verse is interpreted this way, then Jesus was telling the Pharisees that the kingdom of God, which they were asking about, was already present in the person of Jesus. Jesus was the King over the kingdom, and He embodied everything that the kingdom stood for.
Second, it is also possible that Jesus was speaking of the fact that His kingdom was in the hearts of people and not in visible things (Lu 17:20) such as buildings or palaces (note 30 at Mt 6:10 and see note 3 at Joh 3:3). It is true that there will be a future physical kingdom that will rule here on earth, but Paul said that believers are presently in the kingdom of God's dear Son (Col 1:13). That makes it clear that the kingdom of God is already a present-tense reality in the hearts of God's children.