The Hallmark of diabetes is increased levels of glucose and lipids in the blood. It is obvious that all these are ingredients of the food and drinks which we consume. The main source of glucose is carbohydrates present in the food, Even though glucose may be made inside the body by conversion of different constituents of food like proteins and Fats to glucose, this process is called Gluconeogenesis, and happens to a limited extent after body's own stores of glucose are exhausted. 
The derangements of Blood glucose and lipids happen due to inappropriate secretion and action of insulin. The effective amount of insulin available in the body decreases and continues to decline throughout the life of a diabetic till a stage is reached when no insulin is secreted by the pancreas. Since food is the principal source of glucose it also becomes the principal target for control. Controlling food may control blood glucose and cholesterol levels, thus prevent many many deadly complications of diabetes like Heart attack, Angina, Kidney disease, Neuropathy, Blindness etc...What you don't eat is not going to rise in blood..
But to understand what to eat and what not to eat we must first understand our food and its constituents. Food provides us nutrition - Builds up the body- the structural element, bones muscles, skin, the functional parts like organs, glands, and the fluids and secretions produced in the body like digestive juices and various hormones. Food provides energy and is required for maintainence of the body.All these different functions are performed by different constituents of food.
The main constituents of food also called macronutrients which are required on daily basis in large quantities are Carbohydrates, Proteins and Fats. Micronutrients on the other hand are required in very small quantities but are very essential to life, these include vitamins and minerals.
Carbohydrates
Carbohyudrates are the principal source of energy, these are oxidized into simpler sugars like glucose to provide energy to the basic unit of the body- the cells. They are also the main culprits in raising blood glucose levels- both the quantity and type of carbohydrates need to be regulated in diabetics. Examples:- Fruits, vegetables, sugar, jaggery, honey, pulses, cereals, nuts, milk etc. Please click here to read more...
Proteins
Proteins form the building blocks, form cells, enzymes, secretions, hormones and also provide energy, excess of proteins may lead to high blood glucose as well, protein intake need to be restricted in renal complications of diabetes. Examples:-Meat, Milk and its products, pulses, eggs, legumes like soya bean, fish etc More about Proteins in Diabetes...
Fats
Highly concentrated forms of energy, more than double that of carbohydrates, besides giving energy they also lubricate the internal organs, form linings and padding for them, required for the transport of fat soluble vitamins, vit K, vit E etc, both fats and proteins are converted to glucose through a process called gluconeogenesis in liver. Examples:-Oils, Nuts, Fat, Lard, Butter, Clarified butter ( Ghee) meat, fish, seeds More about Fats in Diabetes ...
Vitamins
Vitamins are some chemical substances required in very small quantities, but essential for maintainance of health and proper functioning of body. Deficiency of these vitamins may lead to many specific diseases. Vitamins are not synthesized in the body and have to be consumed with the food only. Some vitamins are made by the bacterias residing in our intestines from the food which we consume. Vitamins are essential for functioning of nerves, clotting of blood and many other functions in the body. More about vitamins and their role in Diabetes .....
Minerals
Minerals are are elements other than Oxygen, Nitrogen, Carbon and Hydrogen which are used by the human body and essential for its functioning, these substances are usually consumed through diet and their quantity is suficient in a balanced diet. Minerals are present in green vegetables, pulses, fruits, legumes, meat and poultry, to read more on role of dietary minerals in diabetes please click here...
Balanced diet
A balanced diet is the one which contains all essential nutrients in required quantities to maintain our body functions. A well balanced diet is essential for good health, a balanced diet should provide all essential nutrients in required quantities. Adequate quantities of all different nutrients are required to maintain optimum blood glucose levels in diabetics, Carbohydrates, proteins and fats - all can be converted into glucose and provide energy for functioning of body. Diet also affects the blood levels of harmful and protective cholesterol present in blood. Diabetic diet is discussed in more elaborately in the article DIET in DIABETES, please click here to read....