Specifically, it means the substance that gives away electrons is oxidized. When iron reacts with oxygen it forms a chemical called rust because it has been oxidized (The iron has lost some electrons.) and the oxygen has been reduced (The oxygen has gained some electrons.). Oxidation is the opposite of reduction. A reduction-reaction always comes together with an oxidation-reaction. Oxidation and reduction together are called redox (reduction and oxidation). Oxygen does not have to be present in a reaction, for it to be a redox-reaction.