Water droplets form on the outside of a glass of ice water due to the following reason:
The temperature of the glass is cold enough to cool the air around the glass. The decreasing kinetic energy of the air molecules causes water vapor in the air to undergo a state change and condense into liquid, which forms droplets on the outside of the glass.
This explanation describes the process of condensation, where warmer, moist air contacts a cold surface (the glass), causing the water vapor in the air to lose kinetic energy and change from a gas to a liquid, resulting in water droplets forming on the glass's surface.