When a flowing stream or river plunges over a wall of rocks (cliff), a waterfall is formed.
If the size of the water fall is big, it is called a ‘Cataract’, while if the rock wall is steeply slanted rather than being vertical, the rushing water is called a ‘Cascade’, where, the water descends in a series of steep slopes.
Niagara Falls is the best example of how overhanging rock edge creates a waterfall. Sometimes, glaciers cut deep into mountain valleys, forming steep cliffs form which water of a flowing river plunges down forming waterfalls.
Below Waterfall info from Wikipedia (Read More):-
Typically, a river flows over a large step in the rocks that may have been formed by a fault line. As it increases its velocity at the edge of the waterfall, it plucks material from the riverbed. This causes the waterfall to carve deeper into the bed and to recede upstream. Often over time, the waterfall will recede back to form a canyon or gorge downstream as it recedes upstream, and it will carve deeper into the ridge above it.
http://en.wikipedia.org/wiki/Waterfall