Here is the z-scheme of photosynthesis:
I am going to refer to the 3 arrows I have drawn in red (#1, #2, & #3)
Your asking about photosynthesis, before we get into the chemistry of why its called "oxidation", first we need to underastand that photosynthesis has 2 objectives:
1) make ATP ~ your not asking about this
2) obtain electrons from "spilling" of a water molecule so that these electrons eventually make their way to NADP+ to convert it to NADPH ~ this is what your asking.... This is arrow #3 in the figure above
So, look at arrow #1, thats the "low energy state" of P680, think of P680 as a protein that its main job is to SUCK UP ELECTRONS (aka oxidation) from water molecules.... This can only be done by providing P680 with energy (aka Light).
After light strikes the P680, it "sucks" 2 electrons from a water molecule (it splits the covalent bonds of water and the electrons of those bonds get vacuumed by P680).... When this happens, P680 becomes the "excited form of P680" (Arrow #2)
Ultimatly, the electron from Arrow #2, makes the complete pathway alllllll the way to that NADP+ to become NADPH (arrow #3)
This is why the process is called "oxidation"... cause your sucking up electrons from water.
Remember when you studied glycolysis? Glucose molecule is said to be "oxidized" by our cells because the cells are "sucking" the electrons from the glucose molecule....