Most historians argue that what changed women's fashions was a change in the status of women in society. During this decade, women in the United States became much more free and their clothes changed to fit their new roles.
During the 1920s, women came to have more free time, more money, and more ways in which to spend both. Because of this, they became more interested in finding ways to have fun. This is in contrast to previous times in which women pretty much just had to concentrate on working (mostly in the home).
Because women now had a chance to get out and do things that were just for fun, their fashions changed. The old, restrictive clothing that had characterized fashion before the '20s gave way to lighter, shorter clothes that gave physical freedom to the women who wore them. The clothes gave physical freedom and, at the same time, symbolized the new freedom that women had.
So, all in all, it was the change in women's status and role in society that changed fashion during this decade.