Can I have a diagram from another book in my work with proper credits? Is it a nice practice to use diagrams from another work and mention the name of the author? If yes, what is the correct way of doing it? Citing the author in the footnote or an in-line citation?
As with many questions here, there are two issues: plagiarism and copyright infringement. 

By citing the work of another you avoid plagiarism, which is claiming the work of another as your own. So you have no issues with that. 

Copyright infringement, however, is governed by laws that vary by jurisdiction. Normally (i.e. most jurisdictions) you can copy (with quotes) some words from the publication of another as long as you cite it. But there are (weakly defined) limits to that. Copyright law is usually civil law (I know of no exceptions) so infringement is subject to lawsuit and in a lawsuit a judge or jury gets to decide what is reasonable and what is not. 

But in copying diagrams and images there is a special consideration. Even when produced inside another work, an image might be interpreted as a "work" in itself. So, copying it might be interpreted as copying an entire work, likely a violation. Another thing to think about is that "A picture is worth a thousand words.". That is more than just a cute saying as it has some truth. So, if it would be improper to copy a thousand words from another work, an image might just might be considered as "too much" to copy, even if cited and "quoted".

But let me give an example that might help you see the issue clearly. Take, for example, the book The Handmaid's Tale by Margaret Atwood. If I were to produce some work in which I quoted a complete chapter, it would very likely be considered infringement. But, as you can see, Wikipedia has provided a synopsis of the entire work without infringing copyright. The linked article explains the entire plot in some detail and lots of the reasoning and structure behind Atwood's work. 

More deeply, however, suppose that I copy a complete chapter, but change a few words. Change names, perhaps, or locations, or phrasing of some parts. This is still almost certainly infringing. 

So, in your case, if you take a figure and "change" it in insignificant ways, moving a few elements then you are on shaky ground. But if you take the ideas underlying the figure and produce your own, from the ideas, not just modifying the figure, then you are, in some sense at least, paraphrasing. But all that means is that you have a defense against a charge of infringement. Possibly a solid defense. So, if you do that and also, as you suggest, say that it was adapted from ... (avoiding plagiarism) then you are probably fine. But in the last analysis, neither you nor I get to make the final judgement if you are challenged. But do more than just mention the name of the author. Cite the actual work. 



And you can avoid the issue entirely by asking for permission as GrotesqueSI suggests here.