type *type; // why is it allowed?
C++11 3.3.2/1 says:
The point of declaration for a name is immediately after its complete declarator (Clause 8) and before its initializer (if any)
So the variable name type is not introduced until after the use of the type name type; the type name is the only available meaning of type during the declarator.
type *k ;// which type?
The local variable name hides the global type name, so that is chosen here. This is described in C++11 3.3.10/1:
A name can be hidden by an explicit declaration of that same name in a nested declarative region or derived class.
The fully qualified type name, ::type, is of course still available.