The formation of cavities (or bubbles) is induced by flow separation, or non-uniform flow velocities, inside a pump casing.

Cavitation in fluid flow is - effectively - a result of Bernoulli's equation on the liquid fluid. As the speed increases, the pressure drops; effectively to the point where the liquid evaporates due to the very low pressure...as the energy is not actually there to sustain the gaseous state, these microbubbles instantly collapse back to liquid form; the effect is cavitation. It can be very harsh on materials as it is a highly erosive action. In a displacement pump, the extremes of pressure drop are really quite low; whereas in a centrifugal pump where the entire operation is reliant on increasing the steady-flow rate which results in extreme pressure drops - particularly around the vanes of the pump.

Why cavitation will occur in centrifugal pumps and not in displacement pumps ?