Clouds are formed when the water vapour in air cools down and forms droplets of water or ice. When lots of these droplets come together they form a cloud.
For a video explanation, please see below.
If you prefer to learn by doing, please see this video of a fun experiment.
For those who like to learn through play, please see the following(links to Amazon).
Photo credit: Anatoly Tipyashlin via 123rf.com