Mainly the vision loss is caused due to two conditions:
Diabetic Macular Edema: The weakened blood vessels leak and accumulate fluid in the retina which causes swelling and exudation in the macula of the retina causing loss of vision
Proliferative Diabetic Retinopathy(PDR): Due to the weakening of the blood vessels, new abnormal blood vessels grow or proliferate causing bleeding into the vitreous. Vitreous is a jelly like substance in front of the retina. A severe vision loss occurs due to the bleeding into the vitreous.