Aerating wine means exposing the wine to air in order to trigger oxidation and evaporation.

By decanting wine you are exposing more surface area to the air. If you don’t have a decanter, pouring the wine back and forth between two containers will work, or at least swirling it around the glass.

Evaporation

Allowing a bit of alcohol to evaporate allows you to smell the wine, not just the alcohol. Sulphites (used to protect the wine from microbes) can smell odd, so letting them disperse as well is a good idea.

Oxidation

Certain molecules in wine react with oxygen, which occurs naturally during winemaking and during bottling. Some wines can benefit from the changes in flavor and aroma from oxidation.