Irony (Gr. είρωνεία (eironeia), from είρων (eiron): one who says less than he means, hypocrite, είρειν (eirein): to speak), a form of speech in which the real meaning is concealed or contradicted by the words used; it is particularly employed for the purpose of ridicule, mockery or contempt, frequently taking the form of sarcastic phrase.
When not recognised, irony can lead to misunderstanding. Even if an ironic statement is recognized as such, it is often less clear what the speaker or writer wants to say than when it is said directly.
The word irony is frequently used figuratively, especially in such phrases as "the irony of fate," of an issue or result that seems to contradict the previous state or condition. The Greek word was particularly used of an understatement in the nature of dissimulation. It is especially exemplified in the assumed ignorance which Socrates adopted as a method of dialectic, the "Socratic irony."
In tragedy, what is called "tragic irony[?]" is a device for heightening the intensity of a dramatic situation. Its use is particularly characteristic of the drama of ancient Greece, owing to the familiarity of the spectators with the legends on which so many of the plays were based. In this form of irony the words and actions of the characters belie the real situation, which the spectators fully realize. It may take several forms; the character speaking may be conscious of the irony of his words while the rest of the actors may not, or he may be unconscious and the actors share the knowledge with the spectators, or the spectators may alone realize irony. The Oedipus the King of Sophocles is the classic example of tragic irony at its fullest and finest.
The above from 1911 EB