Dramatic irony occurs when the audience knows more about a situation than the characters in a story. This creates tension and engagement, as viewers anticipate how the characters will react when they discover the truth. For example, in Romeo and Juliet, the audience knows that Juliet is not truly dead, while Romeo believes she is, leading to tragic consequences. This literary device is commonly used in plays, movies, and literature to enhance emotional impact. It allows the audience to connect with the characters on a deeper level, as they witness the gap between the characters' understanding and the reality of their circumstances.