Basically, oak aging of wine occurs when the wine has been fermented and/or aged in oak casks so that the flavor of the surrounding wood infuses some of its woodiness into the liquid. The resulting wine will usually taste richer, with creamy vanilla undertones and sometimes a little woody or even sawdusty.
The oak is a type of seasoning for wine and getting the optimum level of oaky flavor is vital if a wine is to taste good at the end. Oak aging usually takes place in small oak barrels that hold 225 liters, being replaced every two or three years as newer barrels give the best flavor.