full text of the classic FAA guide
Normally, air must become saturated for condensation or sublimation to occur. Saturation may result from cooling temperature, increasing dew point, or both. Cooling is far more predominant.
Three basic processes may cool air to saturation. They are (1) air moving over a colder surface, (2) stagnant air overlying a cooling surface, and expansional codling in upward moving air. Expansional cooling is the major cause of cloud formation. Chapter 6, “Stable and Unstable Air,” discusses expansional cooling in detail.
CLOUDS AND FOG
A cloud is a visible aggregate of minute water or ice particles suspended in air. If the cloud is on the ground, it is fog. When entire layers of air cool to saturation, fog or sheet-like clouds result. Saturation of a localized updraft produces a towering cloud. A cloud may be composed entirely of liquid water, of ice crystals, or a mixture of the two.