Generally these are caused by a small puncture wound, usually from a cat claw or bite wound. After the skin gets punctured it seals over trapping the bacteria inside. The cats immune system starts sending white blood cells to the sight to start battling the infection. The white blood cells die and turn to what we commonly call puss. The puss accumulation can be quite large which causes a large swelling .
Cats can develop a high fever, become lethargic and stop eating.
This is generally when the owners realize there's a problem. If left untreated the tissue will become weakened and tear open. Occasionally the bacterial infection can go systemic, which can result in a very sick kitty. Typical treatment is lancing of the infected area, and placement of a drain. Cats are also medicated with antibiotics.