Either small liquid water drops or tiny pieces of ice. Meteorologists rank clouds according to their height and whether or not they are flat or puffy. The graph below is Dan's easy way to remember clouds. Nimbus means rain cloud. There are some other specific types of clouds, some of which are very rare.
Clouds form when the air rises.
As a blob of air rises it expands and gets colder, the colder air cannot hold as much water as warmer air. As the temperature and air pressure continue to drop, tiny water droplets group together into clumps called cloud droplets. At this point, the blob of air becomes a visible cloud. If the cloud keeps going up, the cloud droplets will clump together and form water droplets. These water droplets are too heavy to float in the air and they fall from the sky as either rain or snow.