DRAMATIC IRONY

This is most common in plays but can occur in novels: it happens when we, as audience, have knowledge which one (or more) of the characters does not possess and this gives some of their words a twist as we are aware they are in error in a significant way. Another character may also share this information.
Much of Shakespeare's, Othello, depends on tragic dramatic irony as we see that Iago is a villainous liar and that Desdemona is innocent of adultery. When Othello says: "I found not Cassio's kisses on her lips", he means that he was then ignorant of her infidelity but we and Iago know that she never kissed Cassio and that the traces of them were simply not there.
The mode can be used for comic purposes also in classic and popular works.

IRONY

Irony is a wide term which refers to a tone created by discrepancy and may be simplified into three basic modes:
1) an intention has an unexpected outcome; 2)  words do not mean what they say; 3) a character in a play says something which we know to be misguided or wrong. It always involves a twist which we feel to be significant and may be either comic or tragic
These are known as: 1) irony of situation; 2) verbal irony;
3) dramatic irony. All can produce a sense of satisfaction in the reader or member of the audience who feels sufficiently intelligent to have perceived its use.
I intend to deal with each separately over the next couple of weeks.