For the most part, all matter on Earth is in one of three states: solid, liquid, or gas. All matter is made up of moving molecules, and how these are arranged and how much energy these possess determine the state of the matter. Phase changes occur when the matter moves from one state to another; between solids and liquids, the temperature at which this occurs is known as the freezing/melting point (depending if the matter is moving from a liquid to a solid, or a solid to a liquid) and the boiling/condensing point (if the matter is moving from a liquid to a gas, or a gas to a liquid.)
The molecules in a solid vibrate in place; those in a liquid vibrate and also rotate around each other; those in a gas vibrate, rotate, and translate, meaning they have enough energy to move apart from each other.
In the phase change from gas to liquid, the molecules of the gas lose the energy of translation, and the gas "settles down" into a liquid.