Explain how does lubrication reduce friction?

Friction comes into play when two bodies in relative motion come in contact with each other.

Friction restricts the relative motion between two bodies in contact. This is due to uneven surfaces which discourage smooth motion. But when a lubricant is added it fills in the uneven surface making it smooth. So frictional force between two surfaces gets reduced.

In the above figure, the lubricating oil fills the rough gaps between the two surfaces making them smooth.