Volcanic islands are formed by volcanic activity on the seabed, often near the boundaries of the tectonic plates that form Earth’s crust.Where two plates pull apart, lava erupts to form an undersea ridge. Layers of lava build up until a ridge breaks the sea’s surface to form an island.olcanic islands are formed by volcanic activity on the seabed, often near the boundaries of the tectonic plates that form Earth’s crust.