A rainbow is formed when light entering water droplets in the air ( as in a band of falling rain) is reflected at the water air interface and comes out back towards the general direction from which it originally entered the droplet. In this process , the dispersion between rays of different colours doubles; unlike cancelling out when light passes through without reflection at the water air interface.

Thus two conditions are essential to see a rainbow. First ,the observer must be between the sun and the falling rain. Second, the reflection occurs only at two very specific angles , mainly if the sun is at the apex of a cone of an angle of approximately 42 degrees -with the rain band acting as the base. The reflection -and thus the different colours appear in a semicircular shape because that is the geometry of a cone. Occasionally, a second fainter rainbow is seen outside the main rainbow, when the light gets reflected twice inside each droplet before emerging.

This phenomenon can also be seen when fine spray is present- whether in a waterfall like Niagara or Victoria falls , or in fields being irrigated by spraying mechanisms.
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