Phobia, a persistent, irrational fear of a specific object, activity or situation, that leads to a compelling desire to avoid it.

Fear, a distressing emotion aroused by impending danger, evil, pain, and so on, whether the threat is real or imagined; the feeling or condition of being afraid.

Note that it says irrational. It's determined that a phobia is irrational, and a fear is not. I can't imagine where one would draw the line between fear and phobia.
What if there was no such thing as fear? We would be over run by people, who would do anything. If you think about it our entire lives are run by fear. Sure there are laws, and consequences, but what if no one was scared of what would happen to them if they disobeyed? Thinking about college, are we scared that we won't get in? Is that what we think of as fear? Is that a rational fear? Irrational fear would make it a phobia, no?
How do phobias happen?
Unconscious or emotional learning takes place to keep us safe. In primitive conditions when coming into contact with something dangerous, the mind/body would create the optimum state for survival - a panic attack (an intense attack of anxiety characterized by feelings of impending doom and trembling, sweating, pounding heart, and other physical symptoms.)
This type of learning is not of the intellectual, or rational type. If you had to think, “Yes, I think this would be a good time to have a panic attack" we wouldn't be human. This type of learning takes place at an emotional level so that the response can bypass the ‘thinking brain.' In the past, an immediate phobic response to a predatory or poisonous animal would have been exceedingly useful. You see a rattle snake, you become fearful, but this is rational, yes? In today’s complex world however, this learning mechanism often works in an inappropriate way (irrationally.) To become phobic, all you need is a high anxiety state paired with an object. The object does not have to be causing the anxiety. For instance, Robert Graves, a poet, had a phobia of phones because he was using one when a bomb went off near him during the war!
Phobia's also often come about through the misuse of the imagination. Children often get phobias this way, or by seeing a phobia parent. This is why children are often afraid of the dark, or "The Boogie Monster."
Ask people to explain their phobias, it's very difficult to. Sometimes us mere humans can connect our irrational feelings with a reason, or an example of maybe why. There are men and women who devote their lives to make sense of emotions. Theories, books, thoughts, hypotheses; all about fears, emotion, phobias, and senses.
Cures, and the like.
In order to cure a phobia, we need to change the experience on an unconscious level. Associate the feared with the loved. Eat sour patch kids while approaching the severely dreaded, and feared treadmill.
Simply put, the person needs to be able to treat the phobic object in the same way as they would any other everyday object. The best way to do this is to keep the person relaxed whilst they imagine the phobic object. Hypnosis is extremely useful to keep the person relaxed whilst doing this. Talk to them, keep them occupied, distract them with good thoughts. It clearly changes the person's association, making it possible for them to cope with what they once felt terror towards.
That is simply my take on phobias, fears, and the like. I'm sure that there are oh-so-many exceptions depending on the person/phobia match. Our world is run by fear, whether they are phobias or not.