Theory says that the moon is sapping energy from the Earth's rotation because it's moving away from the Earth -- angular momentum decreases as moment of inertia increases, all else being equal. I suspect the friction between water and Earth's crust also plays a role, since the tides are drawn to and fro by the moon.
Tidal drag is not an additional cause, it's exactly the mechanism of how momentum is transferred from Earth to the moon. However as far as I know, oceans play a relatively minor part, with the deformation of Earth's crust and mantle having the greatest effect.
Tidal force is the force that causes an object to stretch in a nonuniform gravitational field. If the object is rotating relative to the field, tidal forces induce dynamic stresses on the object, heating it up and slowing down its rotation (which means something else in the system has to speed up because momentum is conserved).
