Air becomes saturated when it reaches the point at which it cannot hold any more water vapor. When the air cannot hold any more water vapor, the vapor condenses into liquid water and creates dew.
Water on the Earth's surface is constantly evaporating into water vapor. That water vapor is held in the Earth's atmosphere in the form of clouds, but it is also present in the air that humans and animals breathe. Humidity is the measurement of how much water is in the air.
The air has a maximum capacity of how much water it can hold. When the water vapor in the air reaches this maximum capacity, the air is considered to be saturated. Because no more water vapor can be held by the air, the extra water vapor has to go somewhere, so it gets condensed back into liquid water near the Earth's surface. The condensed water as a result of air saturation is commonly referred to as dew.
As with mixtures and solvents, temperature affects the maximum carrying capacity of the air. Warm air is able to carry more water vapor, while cold air is able to carry less. This explains why air can get so much more humid in the heat. At night, when the air cools off, it is able to hold less water vapor, which is why dew is always found in the morning.