How pinhole camera works? What is the working principle of pinhole camera? What is the function of translucent screen in the camera? Now, if we look behind the translucent screen, what do we actually see: the image formed on the screen (real one), or any other virtual image? How can we see the image formed on the screen? Do the light pass through the screen and reach my eye or the light from the back gets reflected on the back of the screen and reach my eye forming an image?
 A: Pinhole camera works on the principle of straight path of light.
Now, Each point of the body emits light, and, just like a flashlight, the beam of light from that point passes through the pinhole and creates a point of light on the back wall of the camera . All the points in the scene do that at the same time, so an entire image, in focus, is created on the back wall of the camera.

But the image created is inverted because, only the inclined rays can pass through the hole i.e the rays from top of the body gradually moves downward and rays from below moves upward forming an inverted image on the wall of the camera.(The rays converge at the hole and then diverge out, forming an inverted image).
Now coming to the real image part, as the image is formed on the screen it is termed as real image. To understand this you have to know the difference between real and virtual image.
A real image is formed on screen, whereas a virtual image seems like to form on screen(but actually doesn't).See the images below...

Here's a rough diagram you asked for

Here an inverted T is formed on the the screen, and the screen being translucent part of the light from the image can pass through it and reach eye!!
