Humidity is how much water vapour is in the atmosphere. Like a sponge, the air is always evaporating and storing water from rivers, lakes and oceans. In tropical parts of the world, warm air is able to hold more water vapour and humidity is higher as a result.
Relative humidity is a measure of how much water vapour is actually in the air compared to how much water vapour the air could hold. This is measured using a wet and dry hygrometer. This type of thermometer has two bulbs; one is kept wet in distilled water and the other dry. The difference in temperature between them can be calculated to give relative humidity. Humidity must be high for fog or clouds to form.