Clouds are liquid or solid water in a, well, cloud of tiny drops/crystals.
Water can also exist as a gas called water vapor. This is invisible. We think of water vapor as “steam,” since that is the point at which water *must* be a vapor, but even at cold temperatures, there is water vapor dissolved into the air. The amount of water vapor that can exist in a given space depends on the pressure and temperature. So sometimes, the atmospheric conditions in one area condense that water vapor into drops or crystals (water can even exist as a gas at sub freezing temps, but it can’t really exist as a liquid, so it goes straight from gas to ice crystal, and vice versa), and we see bajillions of these as a cloud. The cloud drifts into warmer areas or lower pressures and these tiny drops/crystals spread out and turn back into gases.
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