What is a displacement reaction?
Displacement reaction is a chemical reaction in which a more reactive element displaces a less reactive element from its compound.

e.g Iron  + copper sulfate → Iron sulfate + Copper

Iron is more reactive than copper. It displaces copper from its compound, copper sulphate. The reaction is a displacement reaction. In a displacement reaction, a more reactive element displaces, pushes out, a less reactive element from its compound.

 

Do oxides take part in displacement reactions?
Aluminium is more reactive than iron. It displaces iron from its compounds. 
e.g Aluminum + iron  oxide → Aluminum oxide + iron
This is the thermite reaction. It involves mixing the two powders, and heating them strongly. The reaction is exothermic. The reaction mixture gets so hot that the iron melts.

 

 

 

 

 

 

Other metal-metal oxide pairs react. The metal on it own needs to be more reactive than the metal in the compound.
e.g Iron + Copper oxide → Iron  oxide + copper
Iron has displaced the copper oxide, Copper does not react with iron oxide. This is because copper is less reactive than the iron.