I had this question while biking yesterday, and on seaching for some resources on the net, found that actually potholes have their origin in geology. In geology potholes refer to the holes in the shape of pots formed on rocks, especially at the bottom of the water bodies because of water current or due to the action of pebbles.
This term started to be used for the modern roads because the process is similar, water is absored by the road during mansoon, and then ................
read the below pdf, if you are enthu about the science of it.
Nice pdf, and after reading I understood why roads break after monsoon :)