Heat, moisture and friction are generally the cause of blisters. Blisters can also form from fungal infections, allergic reactions, and burns.
Because of a condition called neuropathy, or nerve damage, diabetes often are unable to detect a burn because there is no pain.
Proper care of blisters should involve draining their fluid but leaving their "skin" intact. Protect with a non-stick bandage with mild compression. Skin sprays and adhesive gel pads, as well as special socks, help minimize friction.