When liquid vaporizes its volume increases drastically, hence for adequate running of pumps, vaporization of the liquid shall be avoided during operation, since pumps are designed to handle liquid and not vapor. For e.g. for same or room temperature 4 ft3 of water becomes 3400 ft3 of vapor.
The vaporization begins when vapor pressure of the liquid at the operating temperature equals the external system pressure, which in an open system is always equal to atmospheric pressure. Any decrease in external pressure or rise in operating temperature can induce vaporization. Normally the vapor pressure/bubbles occurs right at the impeller inlet, whenever liquid boils where a sharp pressure drop occurs. The impeller rapidly builds up the pressure, which collapses vapors bubbles causing cavitation and damage the pump internals. This is avoided by maintaining sufficient NPSH. So cavitation is really about the formation of bubbles and their collapse.