The early stage of this disease is called nonproliferative diabetic retinopathy. In this stage blood vessels swell and sometimes bulge or balloon (aneurysm). The vessels may leak fluid that can build up in the retina and cause swelling. This condition is called macular edema, and it changes the vision of individuals with the disease. The blurriness is sometimes compared to trying to look through water.
The fluid deposits that build up in the retina may clear up on their own, but fatty deposits sometimes remain that can affect vision. Later, vessels may begin to bleed inside the retina.
In many cases when the small blood vessels close down, new, unhealthy blood vessels grow. These unhealthy blood vessels are not able to feed the retina. This stage of the disease is known as proliferative diabetic retinopathy.
The unwanted blood vessels can grow on the back of the vitreous. Vitreous is the clear jelly-like fluid that fills most of the eyeball. vessels may also bleed into the vitreous. This bleeding may cause dark spots (floaters), strands that look like cobwebs, or clouded vision.
As vessels heal, scar tissue may also grow. The scar tissue sometimes pulls the retina away from the back of the eye. As a result, the retina can tear or come completely loose from the eye. A detached or torn retina may result in serious loss of sight or even blindness.

Credit: National Eye Institute, National Institutes of Health
Description: In nonproliferative retinopathy, a slight deterioration in the small blood vessels of the retina, portions of the vessels may swell and leak fluid into the surrounding retinal tissue.

Credit: National Eye Institute, National Institutes of Health
Description: Proliferative retinopathy, an advanced form of diabetic retinopathy, occurs when abnormal new blood vessels and scar tissue form on the surface of the retina.

Credit: National Eye Institute, National Institutes of Health
Description: Diabetic macular edema (abnormal accumulation of fluid, fat and proteins in the macular part of the retina).
Terms:
Macular edema - occurs when fluid building up in the retina causes swelling and affects vision.
Nonproliferative - diabetic retinopathy occurring without the growth of unhealthy blood vessels (neovascularization or new vessels)
Proliferative - diabeticic retinopathy occurring when the breakdown of retinal blood vessels leads to the growth of new, unhealthy blood vessels (neovascularization).

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