They say wine tastes better as it ages,
Is it due to fermentation, oxidation or micro organism or what.

Google and Wikipedia are every man's friend. You will get a lot more authentic info from seasoned brewers.

The aging of wine, and its ability to potentially improve wine quality, distinguishes wine from most other consumable goods. While wine is perishable and capable of deteriorating, complex chemical reactions involving a wine's sugars, acids and phenolic compounds (such as tannins) can alter the aroma, color, mouthfeel and taste of the wine in a way that may be more pleasing to the taster. The ability of a wine to age is influenced by many factors including grape variety, vintage, viticultural practices, wine region and winemaking style