The main reason why the Japanese won the war was because they had sea supremacy, pretty much from the start. When the war began the Russian 1st Pacific Squadron was at Port Arthur when the Japanese carried out an early-dawn pre-emptive attack on the harbor using torpedoes [which were not nearly as effective as the Japanese had hoped].
Port Arthur was a heavily fortified harbor, that had been continuously armed & fortified for decades before the war broke out. Because of these coastal defenses the Japanese navy could not get too close to the harbor to engage the Russians without exposing themselves. So the Russians used the harbor to protect the squadron, occasionally coming out to fight the Japanese in a handful of stalemated naval skirmishes.
The rest of the Russian navy was either interned under neutrality laws, or far enough away that they could not offer the Pacific Squadron assistance. This meant that at the beginning, the Japanese had near unchecked use of the sea, and they took advantage of this by landing their army just outside Port Arthur with numerous heavy siege artillery. The Japanese land forces then fought a long & hard siege of the harbor using trench warfare. The Russians were able to send in reinforcements & supplies by a railway spur that linked up with the Trans-Siberian Railway, but they knew Port Arthur was at risk of falling.
So the Russians gathered up virtually every armed ship they had at home that were still floating & sent them 18,000 miles around the globe to try to save Port Arthur before it fell. While this fleet was underway the Japanese got threw enough of the harbor's fortifications to start shelling the Russian ships inside, so they had to try to evacuate. The ships tried to leave, were intercepted by the Japanese, and were decisively defeated. Port Arthur then fell.
The rest of the Russian Navy that had been underway were now tasked with trying to save the next-closest Russian port of Vladivostok. When entering the Sea of Japan the Japanese intercepted them, setting off the Battle of Tsushima which is one of the most decisive victories in naval history.
So now that you know briefly what happened, allow me to go into more detail with specifics on why it happened.
Most commonly, people are told that the Russian warships were obsolete, and the crews poorly trained, and that this is why they performed so badly at Tsushima. This is an absurd myth that will not die.
The Japanese navy consisted of a small core of British-made capital ships, and the Russians had a few of these exact same ships themselves [having bought them from the British like the Japanese had]. The Russians had even taken their British-made ships & built Russian clones of them at home using their own shipyards.
At the Battle of Round Island [10 AUG 1904], when the 1st Pacific Squadron & the Japanese Navy fought each other outside Port Arthur, both sides at one point had to give up fighting because their shells were incapable of inflicting enough damage on their targets. The Proceedings of the United States Naval Institute explained in a 1909 report that the Russian warship Tsesarevich had survived despite being hit by 15 Japanese shots of high caliber, 13 of these shots were 12-inch shells. The fighting even stopped once it got to a range of 12,000 yards because both sides found “…it was a useless expenditure of ammunition.”[1] The Japanese had already been so disappointed with the performance of their British armor-piercing rounds [the same shells used by both sides], that ahead of this battle they had dumped their explosive payloads out of their bigger shells & replaced them with a highly experimental explosive known as Shimosa. Shimosa is a high explosive that is very volatile, so if used in a shell not designed property there is a risk of premature detonation.
With Shimosa in the British A.P. [Armor Piercing] shells the Japanese in battle blew up a huge swath of their 12-inch guns. According to US Admiral Ballard roughly a third of the 12-inch guns in the Japanese fleet were destroyed.[2] This is a really, really big problem because these guns now needed to be refitted which involved taking the ships out of service, something that if done would cost the Japanese their sea supremacy. A few of the guns were still capable of being fired, but were so damaged that the shells would tumble in flight. An armor piercing shell that tumbles in flight cannot damage any target whatsoever because it needs to hit the target at a very specific orientation & momentum in order for that piercing-action to happen.
So in total desperation the Japanese abandoned the 12" British armor piercing shell & replaced them with torpedo shells. A torpedo shell is, as the name implies, a torpedo that has been designed to be fired out of a gun. It carries an extremely high payload, and the idea is that the force of the explosion damages the target without even needing to make direct contact. This is, in fact, the basis behind torpedos & mines, but those things explode in the water. Water does not compress, so the full force of the explosion travels a distance through the water & if within range will destroy the bottom of the ship [which back then was the least protected part]. The ship would then crack open under the waterline, and sink quickly. The big problem is that a torpedo shell if you hit the target explodes in the air, unless it falls short & hits below the water. Air does compress. So the size of the payload has to be increased exponentially to destroy a target. This is why up until now no country used torpedo shells. The Americans had done 20+ years of experiments that they claimed showed the idea had no merit, and back then these types of studies were not secretive so the whole world believed them. But the Japanese really had no other choice. Either fire armor piercing shells out of their damaged 12-inch guns, knowing they will not work, or use a torpedo shell where it can tumble the whole way to the target without causing a decrease in effectiveness.
So fast forward to the Battle of Tsushima. By now the Japanese were able to locate a fuse that stabilize the Shimosa filled shells, but it was not a perfect design and as consequence would only explode a portion of the shells' payloads. But as fate would have it, this ended up helping in battle.
At Tsushima these shimosa filled torpedo shells blew away whole sections of the hulls on Russian ships, on some ships destroyed entire superstructures [that's all the stuff you see above the deckline], and each shell that exploded left behind this residue of unconsumed shimosa everywhere which then would catch fire and act as an incendiary.
Allow me to give you a few quotes from an eyewitness, Capt. Semenoff of the Russian flagship at Tsushima: “incessantly… it seemed as if these were mines, not shells… they burst as soon as they touched anything…” and “…liquid flame of the explosion, which seemed to spread over everything. I actually watched a steel plate catch fire from a burst.”[3] Now a lot of people in the west have criticized Semenoff's account, and for decades it was the ONLY Russian eyewitness account of the battle translated into English, because of the content he added purely for political reasons to help his career [i.e. claiming at one point to try to kill himself when defeat was inevitable, only to have the gun jam]. But, in terms of his descriptions of the Japanese shells & their effectiveness, all of his observations are collaborated by other primary documents. In the 70s one of the leading authorities on the battle, J. N. Westwood translated dozens of Russian sailors' first hand accounts and put them in a book called Witness of Tsushima [sidenote: I have been told it had to be printed in Japan because of its implications insofar as making the West's technology seem blatantly defective]. In the book he includes an except from an officer who had been aboard the Russian ship Orel who wrote “At this moment not far from the ship a shell fell onto the sea, skimmed over its surface amid a shower of spray, and then ricocheted into the air again, like a long black dolphin. Its 20-pood weight cracked down on the deck. Flame burst out and spread like liquid, encircled by crawling brown smoke…”[4] Also please note that Semenoff went out of his way in multiple times in his account to specifically point out that "Port Arthur was different", because on August 10th 1904 the two sides found their shells inflicted no meaningful damage in combat, yet at Tsushima the Japanese surprised them with this highly effective Vesuvium [this is exactly the word the Russian Capt. used, it refers to an experimental warship the US Navy used in the Spanish American War to throw heavy charges of explosive material using pneumatic guns].
The Japanese themselves after the war admit they won because of Shimosa filled high explosive shells, yet the only country that believed them was Germany. No one else- not the French, British, or Americans were willing to believe the state of the art Russian fleet could be destroyed with in-air explosions! This would have huge far-reaching implications later in World War One.
[1] United States House of Representatives, House Committee on Naval Affairs, Government Printing Office, Washington DC, Mar. 20, 1912, 1014 [Miles Poindexter Papers, Special Collections, University of Washington]
[2] Admiral G. A. Ballard, The Influence of the Sea on the Political History of Japan, E. P. Dutton & Company (New York: 1921) 240
[3] Capt. Vladimir Semenoff, The Battle of Tsushima, E. P. Dutton & Company (New York: 1917)
[4] J. N. Westwood, Witnesses of Tsushima, Sophia University & Diplomatic Press (Tokyo: 1970) 208
My history capstone was on Russian military reforms in the aftermath of said war, which is how I know this.