The River Thames and River Cherwell meet there, so whichever water course the invaders used to gain deeper access into Britain, they would have to encounter Oxford.
Geographically, it's as true now, as it was in the time of Lludd.
Lludd did not measure the whole of Britain to find its geographical center. The entirety of the islands would have been none of his concern, and Oxford is nowhere near its meridian anyway.
What he did was visit, or send envoys, across the Isles to discover which other tribes were plagued by the 'white dragon' raiders. Then persuaded their chieftains to unite with him to see the menace off. The Oxford terrain was merely the perfect ambush site, upon which the combined British forces centered.
Lludd was told that he'd witness a 'foreign dragon' fighting on his behalf. He saw it, yet knew from the outset that the red dragon was on his side. Why would he assume that? Surely one 'foreign' dragon is as potentially destructive as the next.
This brotherhood of Celts were not one nation. They covered the British Isles in a patchwork of territories, each with its own leaders, customs and laws. A 'foreigner' could merely be a Celt from a neighboring tribe.
Moreover the Celtic warlords took the title 'Pen Dragon', chief dragon or head dragon. Hence the Arthurian legends are full of such names: Uther Pendragon and Arthur Pendragon.
The white dragon was the invaders from across the sea - the Germanic (or maybe Norse) folk intent upon plundering individual Celtic tribes. The red dragon was the collective brotherhood of Celtic nations coming together to stop them.
It was a persuasive idea which lingered, only to resurface centuries down the line. When the white dragon raids grew into an actual invasion, then the lessons of the red dragon would rise again from the mists of druidic memory.
When the invasion became a long-standing occupation, the red dragon would burn like a beacon, carrying with it all that remained and could be preserved of British culture and ethnic identity. But first there would come the prophecy and the most famous tale of all about Y Ddraig Goch.