How cloud forms?

Clouds are usually formed by condensation $-$ as the air rises, it gets cool and as the temperature of the air gets reduced its ability to hold water vapour decreases, so that condensation occurs. 

When the invisible water vapour in the air condenses into visible water droplets or ice crystals, a cloud is formed. There is water around us everywhere in the form of tiny gas particles, also known as water vapour. Also, there are tiny particles floating around in the air $-$ such as salt and dust. These particles make it easier for the water vapour to condense, and once the process starts, eventually bigger water droplets form around these particles, and these water droplets start to merge with other droplets, forming clouds.