Make the volcano's center
Take an open, empty plastic bottle--the bigger the bottle, the higher the volcano--and tape or glue the bottom to a flat piece of cardboard or wood. The rest of the volcano will be built around it.
Build the volcano's exterior
One way to build the exterior is with clay or homemade play dough. Make the play dough with 6 cups of flour, 2 cups of salt, 4 tablespoons of cooking oil and 2 cups of water mixed together. Add food coloring to get the right effect. Form it into a mountain around the bottle, leaving the bottle mouth unobstructed.
Or make a mountain-shaped frame of wire or wood around the water bottle and cover it with paper mache. Make ridges and other structures for realism. Let it dry and paint the mountain like a real volcano.
A simpler way is to pile wet sand around the bottle in a mountain shape, taking care not to get any inside. This can be done more quickly than clay or paper mache.
Or cut four triangular-shaped pieces of cardboard, form them around the bottle in a pyramid shape, and tape them together.
Blow it up
For the eruption, take 1 tablespoon of dish soap, 1 tablespoon of baking soda, and a small amount of water, and pour it into the mouth of the plastic bottle. A funnel helps. Add in food coloring--red, red and orange, red and blue, or a similar mixture--to mimic the color of lava.
When it is time for the eruption, pour a quarter-cup of white vinegar into the mouth of the bottle and stand back. The reaction between the vinegar and baking soda will send lava-like foam spilling out of the model volcano and down the side.