It's pretty straightforward. Fat is essentially just a way to store energy. If you want to reduce those reserves, you need a net negative in/out balance i.e. it needs to decrease faster than it increases, like draining a bank account by spending faster than you refill it.

In the case of energy, you gain it from food. So you can reduce that by eating smaller amounts and/or less energetic food. Conversely, you spend energy through basic bodily functions (those account for the majority of energy expenditure for the average person) and exercise.