Irony in general deals with expectations and what actually occurs or appearance versus reality. The context of a situation or what is said is important to identifying irony.
This first type of irony is the one teenagers are most familiar with. Verbal irony occurs when there is a contrast between what is said and what is meant. The irony is evident because the speaker is familiar with the situation, voice, or expression that is expected. The speaker can overstate or exaggerate what is said or understate and minimize a statement.
Think of what is typically thought of as sarcasm. If someone walks out into a gray, rainy afternoon and says, "Well, this is a marvelous day for a walk," they are employing verbal irony.
Dramatic irony occurs when the reader or audience knows something to be false or untrue that the character believes is true.
This is employed in all types of literature, and a favorite of Shakespeare's. In Romeo and Juliet, there are several examples of dramatic irony, but the most obvious occurs in the final act. The audience knows that Juliet is not dead, but has taken a potion, but Romeo believes she is dead. When he dramatically takes his own life, the audience is reeling in their seat due to the dramatic irony.
This occurs when the expectations of both the audience and the character(s) are contradicted. When Darth Vader is revealed as the hero Luke Skywalker's father, all are surprised based on expectation and situation.