Osmotic diuretics, such as mannitol and isosorbide, work by increasing osmotic pressure in the renal tubules, leading to increased urine output and are used for conditions like acute renal failure, increased intracranial pressure, and acute glaucoma. They operate primarily in the proximal convoluted tubule and the loop of Henle, counteracting ADH and preventing water reabsorption, but can lead to side effects like dehydration and electrolyte imbalance. These agents effectively reduce cerebrospinal fluid volume and lower intracranial pressure while also aiding in toxin elimination.