Humidity is the amount of water vapor being carried in the air at a given area. How much water air can carry depends a lot on factors like temperature and how much water is actually evaporating into the air. Hotter air can hold more water vapor *but* if you’re at a desert where there’s no water, the humidity is going to be lower. Colder air can’t hold as much water vapor.
The capacity is “100% humidity” – once the air hits that limit, anything else either… stays where it is (like sweat on your skin, it can’t evaporate), or, if the air was rising upward and hits a temperature where it can’t keep the water vapor any more, then the water condensates into clouds and that can result in rain or snow or hail depending on other circumstances. If the temperature differences are very low elevation you end up with fog, which is just a cloud of condensed water vapor at or near the surface level.
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