Irony is when something happens or is said that is opposite of what you expect. The three basic types are situational, verbal, and dramatic irony.
Situational--something happens that is opposite of the expected outcome. Example: A couple have been dating for years. He plans to propose and takes her to a romantic restaurant. He drops to one knee, and pops the question. She laughs out loud and says, "You've got to be kidding. You're just my way of killing time." Expected outcome: she says yes and they live happily ever after. The actual outcome is a shocker.
Verbal irony--something is said that is unexpected. Two gangsters from rival gangs meet unexpectedly in an alley. One pulls out a gun and says, "I'll send you to hell." The other says, "I love you." Totally opposite of what one would expect.
Dramatic irony--when the audience knows more than the actors. Example: Romeo is in the bushes while Juliet is speaking. We know he's there while she is pledging her love to him, but SHE doesn't.