A cooling tower helps to make hot water cooler. It's kind of like dipping your feet in a pool on a hot day, except instead of people, it cools water. When factories, buildings, or power plants make something or use power, they make water hot. This hot water goes into a big machine called a cooling tower. Inside the cooling tower, the hot water flows over a bunch of big, wet, spongy mats, like a huge shower sponge.
When the hot water flows over the spongy mats, the water turns into little droplets, like a mist. When the droplets go up into the sky, they meet a big fan that blows wind. The wind helps the little droplets turn into even littler droplets (water vapor). When the water vapor touches the big tower, it goes down back to the spongy mats again.
This little water-vapor-mist goes up and down over and over again, and every time it does, some of the heat in the hot water goes away. It's like when you breathe on a window, and it gets all foggy - the hot breath turns to cool water, and that helps to cool the window.
After going up and down a bunch of times through the cooling tower, the hot water becomes cooler water, and goes back into the factory, building, or power plant, ready to be used again. And that's how a cooling tower works!