Mechanism for the synthesis of 2-pyridone from pyridine N-oxide
Pyridine N-oxide itself is generally fairly resistant to nucleophilic attack as the ring is already 'electron rich' and doesn't want to accept additional electron pairs. 

When treated with acetic anhydride, however, the carbons at the 2 position become electrophilic (the acetate is electron withdrawing making the C=N bond more like an iminium), hence it is possible to have acetate attack, with subsequent elimination to re-aromatise the ring, leaving us with a 2-substituted pyridine. 

If the acetate is hydrolysed (water, or mild aqueous base), the 2-hydroxy pyridine is formed, which may tautomerise to the more stable 2-pyridnone. 


  


It's worth noting that this mechanism differs significantly from the Boekelheide reaction (the initial pyridine has an additional methyl group at the 2-position), whereby the acetate bound to nitrogen is migrated by means of a [3,3] sigmatropic rearrangement. This rearrangement isn't possible/favourable in this case, as the [3,3] requires a 6 membered transition state, whereas without the methyl group only a 5 membered TS exists.