Certain types of natural fiber can get cooked at the relatively low temperatures in a washer/dryer. The proteins change with heat.
It’s like if you cooked a piece of meat into some beef jerky and it shrinks. You can kinda stretch it a little but cooking it has changed the stuff it’s made of to be different than it was forever. There is no good way to uncook it.
You can unshrink them a lot of times with a half hour soak in a warm water – baby conditioner mixture. Wring your clothes out, then lay on a bath towel. Gently stretch it out to its original size, then roll tightly in the towel, leave rolled for a half hour or so. It’s worked on a number of my shirts (multiple times on the same shirt!).
It relaxes those fibers.
It’s a different answer for each type of fiber and each method of making fabric.
Wool fabric shrinks in agitated hot water (like your washing machine) because the fibers in the yarn it is woven or knit from come un-spun a bit and recombine in a different way to lock together. This is called fulling and is an important part of producing wool clothes. Sometimes the finished fabric is called boiled wool. It can’t stretch back out again.
Cotton weave, like non-stretchy jeans, unspins in a similar way to wool when washed, but because it is made of cellulose instead of proteins it doesn’t lock in a different way. It can return to its original size, to an extent (also called “ease”). Cotton knit (like tshirts) is already stretchy, and when you stretch it in one direction it gets smaller in the other direction. Washing rearranges the knit structure back to the way it originally was.
This is way oversimplified, it’s a really complicated question involving the microscopic features of different types of fabric.
There a minute earth video about this. Tldr, some natural fibers have surface structures that act a bit like ratchets, allowing the fiber to slide past each other one way but the other. This causes them to bunch up tighter than they previously were, making the fabric smaller in the process.
e: here’s the video: https://www.youtube.com/watch?v=-_Pb0Abb6hc
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