How are clouds formed

Clouds form when the invisible water vapour in the air condenses into visible water droplets or ice crystals. There is water around us all the time in the form of tiny gas particles  known as water vapour. When the air is cooled, some of the water vapour sticks to the aerosols when they collide this is condensation. Eventually, bigger water droplets form around the aerosol particles, and these water droplets start sticking together with other droplets, forming clouds.

Clouds form when the air is saturated and cannot hold any more water vapour, this can happen in two ways: The amount of water in the air has increased - for example through evaporation - to the point that the air cannot hold any more water.
The air is cooled to its dew point - the point where condensation occurs - and the air is unable to hold any more water.