The external causes of cancer are numerous: environmental causes alone could fill a book. Everything from ultraviolet radiation to chemicals like arsenic can potentially cause cancer--it's a matter of the severity and duration of exposure. Genetics and lifestyle also play significant roles, the latter dictating the likelihood of exposure to carcinogens.
From a physiological standpoint, cancer develops through the runaway mutation of cellular DNA. Generally, cells whose DNA is damaged by whatever means undergo apoptosis, essentially cellular "suicide." In this process, cells break themselves down into pieces that are consumed and processed by other cells in the body.
However, there are instances of mutated cells failing to initiate apoptosis--cells like this are what tumors are made of. They are essentially worthless cells that propagate themselves, while neither they nor their "offspring" break down naturally.
This is a problem, because even non-mutated, functional cells break down after a while. That's how the body works--cells are constantly being created and dying. Cancerous cells are a proverbial monkey wrench thrown into the works, sort of like a player who refuses to leave the stage, thereby bringing the whole show down around him.