OAuth is all about delegating Authorization (choosing someone who can do Authorization for you). Note that Authentication and Authorization are different things. OAuth is Authorization (Access control), and if you want to implement Authentication (ID verification) also, OpenID protocol can be used on top of OAuth.
All big companies like Facebook, Google, Github,... use this kind of authentication/authorization nowadays. For example, I just signed in on this website using my Google account, this means Stackoverflow doesn't know my password, it receives the allowance from Google where my password (hashed obviously) is saved. This gives a lot of benefits, one of them is; In the near future you won't have to make several accounts on every website. One website (which you trust most) can be used to login to all other websites. So you'll only have to remember one password.