Cavitation occurs when the bubbles in the liquid move down stream, the cross sectional flow area opens up in the body of the pumps/valves, the velocity goes down and pressure builds up. Those conditions create bubbles with an internal pressure equal to the vapor pressure surrounded by a higher pressure. The bubbles collapse in on themselves. This combination of bubble formation and the resulting choked flow, along with the collapse of the bubbles downstream is called Cavitation.
Cavitation causes serious wear and tear and can damange a part in the pumps or valves eventually. The primary causes for their formation include vaporization at low pressure, air ingestion, flow turbulence, and internal re-circulation.
General industry usually uses very hard materials to give some improvement, but the improved performance is typically not enough to justify the high cost of the material.