The reaction between calcium oxide (CaO) and water (H$_2$O) is an exothermic reaction, meaning that it releases energy in the form of heat. When calcium oxide (commonly known as quicklime) reacts with water, calcium hydroxide (Ca(OH)$_2$) is formed, and a significant amount of heat is released during the process.
Exothermic reactions are characterized by the release of energy, typically in the form of heat, light, or both. The heat released in this reaction is so significant that it is used in industrial processes such as the production of cement.
In this specific reaction, the calcium oxide undergoes a chemical transformation with water, releasing energy as the new bonds are formed in the calcium hydroxide product. This is a typical feature of many metal oxide reactions with water.
This reaction is also an example of a hydration reaction, where water is added to a substance to form a new product.