In addition to what the previous poster has said, hail is formed in very tall thunderclouds. The raindrops freeze, fall, get a coating of moisture, get swept up by wind currents in the clouds, freeze, fall, get coated, get swept up to the colder levels again, and so on, until they are so heavy that they fall.
You can likely find pictures if you google the question.
Well it has been a while since I have thought about it but the basics are this: when it rains and the upper atmosphere is below freezing the rain drops freeze, the more "cloud" they pass thru the more moisture these ice drops pass through more moisture and they freeze additional layers, if they pass thru enough water vapor they can get pretty big. If you have ever noticed, hail is almost always damp. This is from moisture that did not freeze (not because the hail is melting). Sometimes the atmosphere is cold enough that the last layer does freeze as it falls to earth. This hail sits on the ground a bit longer (but you would hardly notice).
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