How does osmosis work?

Thinking of osmosis represented by two water towers attatched with a pipe at the bottom helped me to understand. If one tower has a higher level of water than the other, water will flow into the other to even the level out. In the case of osmosis, the pipe is the pipe is the semi permeable membrane which the water travels through. 

For a more practical description, try dipping a corner of a tissue into some water. Gradually the water will travel accross the tissue, since there is a much higher concentration of water at one side.

Water concentration is measured by water potential. Water will travel from a region of higher water potential to a region of lower water potential.