Dramatic irony occurs when the audience knows more about a situation than the characters in the story do, creating a contrast between the character's understanding and the reality of the situation.
A classic example of dramatic irony can be found in William Shakespeare's play "Romeo and Juliet." In this play, Juliet takes a potion that makes her appear dead. The audience is aware that she is not truly dead but will awaken after the effects of the potion wear off. However, Romeo, unaware of this plan, believes that Juliet is truly dead and ultimately takes his own life in despair. This creates a poignant and tragic irony, as the audience knows the truth while Romeo does not, leading to tragic consequences.