What is this called?
Condensation, normally.
Depending on how pedantic I'm being, it's not like steam at all, or it's exactly like steam.
Pedantic - Steam is invisible. You can only see the water vapour left after steam has condensed.
Unpedantic - What you're referring to when you say "steam" is miniscule condensed droplets of water. Exactly the same thing as this, except at a different temperature.
What causes it?
Pretty much what Jack said, although I'll add some more science:
On compression:
As there is a limit on the density of water vapour - defined by the current temperature - and as compression adds extra water vapour per cubic centimetre (in the same way that you're adding extra nitrogen and oxygen per cc), any excess water will condense out of solution with the air, meaning a few drops of water will collect in the chamber.
This is then blasted out as very fine droplets on firing.
On decompression:
Because gasses cool on rapid decompression, it also means that the amount of water vapour that can be in the air falls very rapidly.
All the water that WAS still vapour before firing has to condense out of the air.
After firing, all of the propellant gasses are
completely zero humidity, as there is no longer any water vapour in amongst it - Well, not in practice, as water vapour from the surrounding air mixes in with the propellant gases very fast
And how do it so more comes out?
Either add a little extra water into your chamber before you pressurise it - or use higher pressures (which adds extra humidity/water vapour into the chamber, as well as cooling the gasses on firing more).