Most water intoxication is caused by hyponatremia, an overdilution of sodium in the blood plasma, which in turn causes an osmotic shift of water from extracellular fluid (outside of cells) to intracellular fluid (within cells). The cells swell as a result of changes in osmotic pressure and may cease to function.
http://en.wikipedia.org/wiki/Water_intoxication
Cytolysis, or osmotic lysis, occurs when a cell bursts due to an osmotic imbalance that has caused excess water to move into the cell. It occurs in a hypotonic environment, where water diffuses into the cell and causes its volume to increase. If the volume of water exceeds the cell membrane's capacity then the cell will burst.
http://en.wikipedia.org/wiki/Cytolysis
Osmosis is important in biological systems as many biological membranes are semipermeable. In general, these membranes are impermeable to organic solutes with large molecules, such as polysaccharides, while permeable to water and small, uncharged solutes. Permeability may depend on solubility properties, charge, or chemistry as well as solute size.
Suppose we place an animal or a plant cell in a solution of sugar or salt in water.
If the medium is hypotonic — a dilute solution, with a higher water concentration than the cell — the cell will gain water through osmosis.
If the medium is isotonic — a solution with exactly the same water concentration as the cell — there will be no net movement of water across the cell membrane.
If the medium is hypertonic — a concentrated solution, with a lower water concentration than the cell — the cell will lose water by osmosis
http://en.wikipedia.org/wiki/Osmosis
