This is not a single underlying disease, but develops alongside other processes such as glomerulonephritis or diabetes. The kidneys pass large amounts of protein (the urine may be "frothy") into the urine and this means the water in the blood stream passes into the tissues, particularly the feet and around the eyes. Usually it is caused by a glomerulonephritis such as minimal change nephropathy (the most common in children) or membranous glomerulonephritis.
The kidney function may be absolutely normal and the only problem is the protein leak. Treatment is by restricting the fluid intake, using diuretics and perhaps aspirin and cholesterol lowering drugs. A kidney biopsy will be done to determine the exact nature of the problem and to decide if treatment with steroids or other drugs is needed.

Links

http://kidney.niddk.nih.gov/kudiseases/pubs/nephrotic/
http://www.mayoclinic.com/health/nephrotic-syndrome/DS01047
http://www.webmd.com/cancer/tc/nephrotic-syndrome-topic-overview