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Shrinkage is the process in which a fabric becomes smaller than its original size, usually through the process of laundry. Novice users of modern laundry machines sometimes experience accidental shrinkage of garments, especially when applying heat. Others may intentionally shrink a garment to their size. Some may purchase a garment one or more sizes larger in anticipation of shrinkage.
Causes
For wool garments, shrinkage is due to scales on the fibers which heat, water and agitation cause to stick together. Other fabrics are stretched by mechanical forces during production, and can shrink slightly when heated (though to a lesser degree than wool). Some clothes are "pre-shrunk" to avoid this problem.
References
Shrinkage (fabric) Wikipedia(Text) CC BY-SA