Here's why:

* Decomposition: A single reactant (water, H₂O) breaks down into two or more products (hydrogen gas, H₂, and oxygen gas, O₂).

* Other types of reactions:

* Combination: Two or more reactants combine to form a single product.

* Single displacement: One element replaces another in a compound.

* Double displacement: Two compounds exchange ions.

This reaction is also specifically a electrolysis reaction, as it requires an electrical current to break the bonds in water.