All air conditioners, whether they are the large central variety or smaller window units, produce water when they are operating. Water is a by-product of the air conditioning process. It is due to the fact that warm air has the ability to contain or hold more moisture than colder air.
Actually there is no such thing as cold, only heat, so cold is a relative term. Something that’s colder simply has less heat within it than a warmer object. The molecules within a warm object are moving faster and are further apart than a colder object. Applying this principle to air, this allows for more space between the molecules to contain water vapor.
When an air conditioning unit is functioning, the warm moisture-laden air is drawn in through the return ducts by operation of a fan and passed over a grid of coils that are cold. The coils are cold because of the refrigeration principle which is basically the evaporation of a liquid under high pressure changing into a gaseous form.
It’s more complicated than that but for purposes of this question its enough to know that the coils get very cold. The moisture in the warm air is squeezed out or condenses back into a liquid because the colder air no longer has the spaces between its molecules to contain it. Its sort of like wringing out a sponge. This condensate water is usually collected by allowing it to drip into a pan. The pan usually has a pipe connected to it to allow for it to drain safely outside the home. So actually, if you see water dripping out of this pipe it means that your system is working properly, or at least adequately. This is one time when a dripping pipe is actually a good thing!