They are caused by the expansion and contraction of ground water after the water has entered into the ground under the pavement. When water freezes, it expands.
Think of when ice cubes are made. A tray full of water is put into the freezer, and when you remove the tray from the freezer, you will notice the water has expanded.
This same effect happens when water gets into the ground under the pavement. If it has a chance to freeze, it will take up more space under the pavement, causing the pavement to expand, bend, and crack. This weakens the material pavement. When ice melts, the pavement contracts and leaves gaps or voids in the surface under the pavement, where water can get in and be trapped. If the water freezes and thaws over and over, the pavement will weaken and continue cracking.
As the weight of cars and trucks pass over the weak spot in the road, pieces of the roadway material weaken, which will cause the material to be displaced or broken down from the weight, creating the pothole.
Water will freeze at 32 degrees Fahrenheit. When salt is used, it lowers the temperature that water will freeze. This creates an artificial freeze-thaw cycle that permits more occurrences of the damaging cycle to occur. This happens more often in the spring because of the melting that takes place, as well as the temperatures fluctuating above and below the freezing point very frequently.