The upper atmosphere is cooler than the air near the surface of the earth. It is filled with tiny particles. Particles are tiny bits of things such as dust, salt, and volcanic ash. When the water vapor and air mixture cools in the upper atmosphere, it hits the tiny particles that are there. When this happens, the water condenses, or changes back into water droplets.
Water droplets are tiny drops of water.
When millions of water droplets group together they are called a cloud.