How is GPS used to synchronize oscillators in a distributed system? I heard that it is important to have all oscillator clocks at different places be synchronized for example in a geographically distributed system such a telecommunication network. Of course to some error margin.

They fix GPS receivers in the base stations to synchronize the oscillators. I know GPS transmits time, as in our watches. 

Could someone please explain what does this time of the day has to do with synchronizing oscillators?

Thanks a lot.
Part of the GPS signal is a 1 pulse per second clock that can be used in distributed systems for timing synchronization.  

This patent has some diagrams that might help, e.g.



Regarding how accurate it is, I'm not sure. This paper has the following graph... which seems pretty good to me.