Clouds form during the process of condensation in the water cycle. When water vapor in the atmosphere cools down, it changes back from gas to liquid, creating tiny water droplets or ice crystals. These droplets cluster together to form clouds. This process typically occurs when warm air rises and cools at higher altitudes, where temperatures are lower. The cooling of the air can happen due to various reasons, such as geographical features or weather fronts.
In summary, the formation of clouds is a critical part of the condensation phase of the water cycle, connecting evaporation and precipitation within the continuous movement of water in our environment.