The term "redox" stands for reduction-oxidation. It refers to electrochemical processes involving electron transfer to or from a molecule or ion, changing its oxidation state. This reaction can occur through the application of an external voltage or through the release of chemical energy. Oxidation and reduction describe the change of oxidation state that takes place in the atoms, ions or molecules involved in an electrochemical reaction. Formally, oxidation state is the hypothetical charge that an atom would have if all bonds to atoms of different elements were 100% ionic. An atom or ion that gives up an electron to another atom or ion has its oxidation state increase, and the recipient of the negatively charged electron has its oxidation state decrease.
For example, when atomic sodium reacts with atomic chlorine, sodium donates one electron and attains an oxidation state of +1. Chlorine accepts the electron and its oxidation state is reduced to −1. The sign of the oxidation state (positive/negative) actually corresponds to the value of each ion's electronic charge. The attraction of the differently charged sodium and chlorine ions is the reason they then form an ionic bond.
The loss of electrons from an atom or molecule is called oxidation, and the gain of electrons is reduction. This can be easily remembered through the use of mnemonic devices. Two of the most popular are "OIL RIG" (Oxidation Is Loss, Reduction Is Gain) and "LEO" the lion says "GER" (Lose Electrons: Oxidation, Gain Electrons: Reduction).  Oxidation and reduction always occur in a paired fashion such that one species is oxidized when another is reduced. For cases where electrons are shared (covalent bonds) between atoms with large differences in electronegativity, the electron is assigned to the atom with the largest electronegativity in determining the oxidation state.
The atom or molecule which loses electrons is known as the reducing agent, or reductant, and the substance which accepts the electrons is called the oxidizing agent, or oxidant. Thus, the oxidizing agent is always being reduced in a reaction; the reducing agent is always being oxidized. Oxygen is a common oxidizing agent, but not the only one. Despite the name, an oxidation reaction does not necessarily need to involve oxygen. In fact, a fire can be fed by an oxidant other than oxygen; fluorine fires are often unquenchable, as fluorine is an even stronger oxidant (it has a weaker bond and higher electronegativity, and thus accepts electrons even better) than oxygen.
For reactions involving oxygen, the gain of oxygen implies the oxidation of the atom or molecule to which the oxygen is added (and the oxygen is reduced). In organic compounds, such as butane or ethanol, the loss of hydrogen implies oxidation of the molecule from which it is lost (and the hydrogen is reduced). This follows because the hydrogen donates its electron in covalent bonds with non-metals but it takes the electron along when it is lost. Conversely, loss of oxygen or gain of hydrogen implies reduction.