In ionic compounds, oxidation states tell us about the movement of charge within the compound. For example, chlorine has a very high electronegativity which means that it really likes electrons and sodium has a very low electronegativity which means that it really hates electrons. When sodium and chlorine are close together, sodium will give away an electron to chlorine. A change in charge has taken place; chlorine's charge has gone down which we call reduction, and sodium's charge has gone up which we call oxidation.