As a baby moves towards the birth canal, it presses against the pressure receptors in the muscular part of the uterus (cervix). These receptors evoke a release of oxytocin from the brain (and maybe also the placenta). When the oxytocin reaches responsive receptors in the muscles of the uterus it will increase muscular tension thus increasing stimuli to the pressure receptors. This goes on as "labor" until the pressure is relieved: the baby is born -- oxytocin is no longer evoked and labor contractions cease.
Positive feedback intensifies social trust: Oxytocin is produced in social contexts that involve mutual trust, in part because it can relieve anxiety.
"Oxytocin is made in magnocellular neurosecretory cells in the supraoptic nucleus and paraventricular nucleus of the hypothalamus and is released into the blood from the posterior lobe of the pituitary gland. Oxytocin is also made by some neurons in the paraventricular nucleus that project to other parts of the brain and to the spinal cord." Stimuli that evoke it include distention of the cervix, stimulation of the nipples, and during orgasm. It figures in behavioral patterns such as sexual arousal (many mammals) pair bonding (prairie vole) , "falling in love" (humans), increasing trust, and reducing fear. It may also affect specific aspects of learning and memory. (more at OXYTOCIN - DEEP site)