Here is a picture of a bad turbo. Notice the damage to the vanes:

Here is a picture of a good turbo. Notice the difference:

A bad turbo will have a lot of play in the cartridge, which results in the vanes contacting the housing. This play will allow oil to be sucked into the intake instead of flowing to the return line. The combination of oil being sucked in as well as the lower boost level results in black smoke coming out of the exhaust.
I had a turbo on an excavator with too tight of tolerance to the housing. The excavator was sitting outside for an extended period of time and rainwater caused a little rust in the turbo. This prevented the cartridge from spinning and also resulted in a lot of smoke due to low boost (lack of air).
Smoke can be due to a lack of air (low boost). Low boost can be a bad turbo, but can also be caused by leaks in the piping from the turbo to the intake. A pressure test can be performed. Take a plastic cap and drill a hole in it. Insert a tire valve into the hole. Put this one in the hose at the turbo. Secure with a hose clamp. Put another solid cap in the hose at the intake (flow control valve end) and secure with a clamp. Add a little pressure and listen for leaks.
Smoke could also be caused by a broken rocker on the intake side. The cylinder with a broken rocker cannot get enough air to mix with the fuel. This results in unburnt fuel (smoke).
Could also be caused by a stuck egr valve. This allows exhaust back into the intake, which lowers the amount oxygen available and again results in unburnt fuel (smoke).