Cloud was a boy who grew up in Nibelheim and left around the time he was 14 or 15, in the hopes of joining SOLDIER and becoming strong like the legendary Sephiroth. The reason he wanted to do this was two fold: 1) He wanted to impress Tifa, and 2) He wanted to be able to protect Tifa if she ever needed rescuing, as he had been unable to once before.
He had been an outcast among the children of Nibelheim, whereas Tifa was very popular, and barely noticed that he existed. Then her mother died one day, and she ran out of her house in grief and began to climb Mt. Nibel, and Cloud followed. However, on the rope bridge leading into the mountain, Tifa missed her step, losing her balance, and though Cloud tried to save her, he could not, and both fell into the gorge. Cloud was barely hurt, while Tifa was in a coma for a week, others putting the blame for the entire matter on Cloud, believing him to have taken Tifa into the mountains.
Cloud was determined that he wasn't going to be so useless again, and so he wanted to join SOLDIER, become stronger, and prove his worth and hopefully gain Tifa's attention. The Spring before leaving Nibelheim, he had called Tifa out to the town well and told her of his decision, and after doing so, she asked him to make a promise to her that if she were ever in trouble that he would come rescue her, which happened to be one of his reasons for wanting to join SOLDIER to begin with, and so he promised.
He leaves Nibelheim the next Summer and goes to Midgar in the hopes of joining SOLDIER. Of course, he doesn't make the cut and is deeply ashamed, which is why he insists upon hiding his identity from Tifa when he returns to Nibelheim as part of Zack and Sephiroth's entourage.
After the events that take place during their mission there (Sephiroth's destruction of Nibelheim, murder of its People, and his assault upon Tifa, Zack, and Cloud, culminating in Cloud throwing him into the Mako beneath the Mt. Nibel Reactor), Cloud and Zack are captured by Hojo, along with the remaining survivors of Nibelheim, and over the course of the next five years are captives in his laboratory in the Shinra Mansion, where he performs Mako infusion upon Cloud and the other survivors, as well as injects them with JENOVA Cells. Hojo's Sephiroth "Clone" project was unsuccessful in regard to Zack as his body failed to have the desired effect to the JENOVA Cells, whereas Cloud's had said reaction, as was also the case with the black-cloaked folks seen throughout the game, them having actually been the other survivors of the Nibelheim massacre:
(From the Escapee Reports in the back of the Shinra Mansion's Library)
Quote:
Escapee Report No. 2
Description of the time of capture.
A - Former member of SOLDIER/Number ( )
No effect could be detected from either Mako Radiation Therapy or Jenova on him.
B - Regular/Number ( )
Reaction to Jenova detected.
Those in whom the Mako had been infused, but did not have a resistance to the effects of Mako Poisoning as Zack and other members of SOLDIER did, suffered from extreme Mako Poisoning, likely due to an overload of knowledge in their minds. This is because Mako is derived from the Lifestream, which itself contains the knowledge of those who have lived before. The result of this is that those with a low sense of self-awareness/self-acceptance -- usually having weak wills as a result -- lose their identities and very sense of self. Having been unaccepting of who they were before, as so few People are, having many other thoughts suddenly flooding their minds no doubt made it almost impossible for them to determine their own place among them, and, as a result, they became little more than vegetables in mind.
After five years of imprisonment, Zack manages to break himself and Cloud out of the Shinra Mansion, and they make their way back to Midgar, with Cloud in a semi-catatonic state the entire way, suffering from the effects of extreme Mako Poisoning. When they finally return to the outskirts of Midgar, Zack is gunned-down and killed by Shinra soldiers and Cloud is left to die. Cloud, however, survives, and takes Zack's sword, stumbling his way into Midgar, and is then found by Tifa at the train station. Due to the fragile state of his mind at this time, he had little concept of his own identity remaining to him, beyond that concept which he had aspired to be like and had been able to witness in another for the last five years: Zack.
This is likely what kept him from remaining with a broken mind as the black-cloaked folks did. He had Zack's identity to focus on during his weakened state, Zack being one whom he admired and aspired to be like himself. Perhaps seeing Tifa would have pushed that desire to the forefront of his mind altogether due to him having wanted to be someone like Zack to impress her, but in either case, he adopted several characteristics of Zack's personality and mannerisms at this point and incorporated events in Nibelheim involving Zack into his mind as events that had involved him instead.
This was made all the easier by the fact that he was now wearing a SOLDIER's uniform, was in possession of Zack's sword, and possessed great strength and agility due to Hojo's experimentation. Cloud had an identity to focus on with which to pull himself out of his lost state amidst all the memories floating around in his head that were not his own, whereas the black-cloaked folks did not. This would later spell disaster, however.
Hojo and Cloud both later believe Cloud to have been a failed experiment due to Cloud having never been issued a number as the black-cloaked folks were. Cloud is first told by JENOVA/Sephiroth at the Reunion that he was an incomplete Sephiroth Clone, and Cloud himself then goes on to tell Hojo that he had been a failure. It was a result of Cloud coming to believe he had been nothing more than a failed Sephiroth Clone and that he had been simply manufactured in Hojo's lab that led him to simply hand the Black Materia over to JENOVA/Sephiroth, allowing Meteor to be summoned forth. What Cloud did not yet remember at this time, however, was Zack's role in his past, including the fact that Zack had broken himself and Cloud out of the Shinra Mansion shortly before the main events of the game began, and before Cloud could be given a number. Cloud had, in actuality, been a success. In fact, Hojo later regarded him as the only success:
(On the Sister Ray, near the end of Disc 2.)
Quote:
Cloud
"Hojo! Stop right there!!"
(Hojo does not turn to face them. He merely continues his work.)
Hojo
"Oh... the failure."
Cloud
"At least remember my name! It's Cloud!"
(Hojo stops working but still does not turn)
Hojo
"Every time I see you, I..."
"It pains me that I had so little scientific sense..."
(He resumes.)
Hojo
"I evaluated you as a failed project."
"But, you are the only one that succeeded as a Sephiroth-clone."
"Heh, heh, heh......... I'm even beginning to hate myself."
As can be seen from all this, the often believed concept of Cloud being a Sephiroth Clone is inaccurate in the sense that he was a genetic duplicate of the legendary SOLDIER. Rather, this term of him being a Sephiroth "Clone" is intended in the sense that Cloud would be similar to Sephiroth in terms of the experimentation conducted on him, having been infused with Mako and injected with JENOVA's Cells.
The Sephiroth Clones are simply the people that were the survivors of Sephiroth's massacre in Nibelheim five years before the main events of the game, and which Hojo captured upon his arrival there shortly after Sephiroth's defeat at the hands of Cloud. We know this based on Zangan's (Tifa's Martial Arts instructor) letter to her:
Quote:
"Tifa, what's happened to our town? Was it all an illusion, or
just a dream? No, it was neither. I remember trying to get people out of
the flames, but not having the strength... Burning with anger, I went to
the reactor to kill Sephiroth."
"But he was nowhere to be found. Instead, I found you, collapsed
inside. I felt saving you was far more important than going after
Sephiroth. There were several others that were still alive inside, but I
was only able to save you."
"As I was coming out of the reactor, Shinra troops were just
arriving. I recall a scientist named Hojo was in charge. He ordered the
troops to gather up everyone still alive for the experiment. I didn't know
what type of experiment he was talking about, but I wasn't about to let
them have my dearest student."
We also know this based on the Periodic Report to Professor Hojo that can be found in "Tifa's House" on the desk across from the piano in Nibelheim in the game's present:
Quote:
1 Clone Activity Report
Unforuntately, no 'CLONES' have left this town this quarter. As previously reported, the 'CLONES' seem to be sensing something. But all they say is 'reunion' or 'Sephiroth' and show no other signs of activity.
Based on this we know that the point of origin for the Sephiroth Clones was Nibelheim, and taking into consideration that Hojo had ordered the Shin-Ra soldiers that accompanied him five years before to round up all the survivors of Sephiroth's massacre for an experiment, these survivors are certainly the Sephiroth Clones. Also, we know that Cloud had a real childhood and truly grew up in Nibelheim based on the memories that Tifa helps him piece together in the Lifestream. With all this in mind, it would be more accurate to say that the experiments performed on Sephiroth were "cloned" rather than Sephiroth himself.
Finally, keep in mind that this game was originally in Japanese, and that quite often connotations and meanings do not translate literally into English. The word "Clone" was used simply because Japanese doesn't always have a direct translation to English in which the context is the same, and the word "Clone" tends to fit better with the traditional Fantasy mindset of one individual being similar to another than would a word that would bring a Xerox to mind ("Copy"), though it wouldn't be any less accurate.
Finally, Cloud frees his mind and becomes autonomous from JENOVA/Sephiroth during the game's ending after having accepted himself for who he truly was earlier in Mideel. Whether the final battle within Cloud's mind was truly a battle between Cloud and JENOVA/Sephiroth's will, or him simply purging himself of their/his/its influence, Cloud had gained autonomy and a strong enough will to carry himself.