Condensation is the process by which water vapor (a gas) forms into liquid water. Condensation occurs because the water vapor molecules, which are far apart in a gas, move together as temperature cools or air pressure decreases. 

Condensation is responsible for the formation of clouds. Even fog, which is a just a cloud near the ground, is a visible sign that condensation is occurring around you. Tiny bits of dust or smoke in the air allow water to clump together into visible droplets of water. As those water droplets grow they get heavier and fall as precipitation, or rain. 

Here is an experiment that demonstrates condensation. 

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