In general diols are prepared by methods analogous to those used for preparing alcohols.
For example, dicarbonyl compounds can be reduced to diols:

Question:
How could you make the 1,6-hexanedial shown above ? 

Specific Methods

However, there are a couple of specific methods for the preparation of 1,2-diols:
 

Hydroxylation of Alkenes
Hydrolysis of Epoxides

 

Hydroxylation of Alkenes

Summary

• Typical reagents :  OsO₄ / tBuOOH / HO^-  or  KMnO₄ / NaOH / 0 ^oC
• With osmium tetroxide, OsO₄, is used catalytically and the peroxide is a co-oxidant.
• Potassium permanganate, KMnO₄ which turns from purple to colorless during the reaction can be used as a simple functional group test.
• During these reactions, the two oxygen atoms are transferred from the same species at the same time.
• Both sets of reagents form 5 membered cyclic ester intermediates.
• As a result, the stereochemistry is syn. This is shown by the following example:

Questions:
What other reaction is commonly used as a functional group test for alkenes ? 
What is the oxidation state of the osmium in osmium tetroxide ? 
Is the osmium oxidized or reduced during the formation of the osmate ester ? 
What is the oxidation state of the potassium permanganate ? 

Related reactions

• Addition reactions of alkenes (chapter 6)
• Hydrolysis of Epoxides

MECHANISM FOR REACTION OF ALKENES WITH OSMIUM TETROXIDE
Step 1: The p electrons in the alkene act as a nucleophile forming a favorable 5 membered ring as a cyclic osmate ester as an intermediate. Note the origin of the cis stereochemistry.
Step 2: The hydroxide liberates the cis-diol and the reduced osmium species.... this would then be reoxidized by the peroxide co-oxidant.

Hydrolysis of Epoxides

Summary

• Typical reagents :  H₃O⁺ or aq. NaOH
• Reactions of epoxides are covered in more detail in Chapter 16
• The nucleophile attacks the epoxide and opens the ring by breaking the C-O bond.
• Since the nucleophile attacks at 180^o to the breaking C-O bond, the stereochemistry of the diol is trans.

This is shown by the following example:

• Reactions of Epoxides
• Hydroxylation of Alkenes