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The definition of allegory has two senses. The first relates to when an author writes an allegory by design as did Edmund Spenser and John Bunyon. In this sense of allegory the characters are usually given titles rather than names: e.g., the Red Crosse Knight and Mr. Worldy Wiseman. The second sense of allegory depends on the reading given a particular work, passage, sentence, line. In other words, a particular reader may find allegory through his/her reading whereas another reader may not recognize allegory in the same work.
Having said this, John Dryden wrote Absalom and Achitophel as a satire to instigate political reform. The era was that during which a faction in England was trying to seat the illegitimate son of Charles II (after the Restoration) on the throne through a rebellion against Charles II. Dryden used a Biblical tale, that of the rebellion of Absalom against King David, in the humor of satire stated with the sweetening leaven of verse to point out the wrongfulness of a rebellion and the disastrous impending outcome of such a rebellion.
As you can see from the excerpted quote below, Dryden did not style Absalom and Achitophel as an allegory, as did Spenser and Bunyon, but he was certainly casting then contemporary figures in the role of Biblical heroes and villains. Therefore, an understanding of Absalom and Achitophel as an allegory revolves around the second sense of the definition of allegory, which is that a reading of allegory rests with the reader, literary analyst, literary critic.
Michal, of royal blood, the crown did wear,
A soil ungrateful to the tiller's care:
Not so the rest; for several mothers bore
To godlike David several sons before.
But since like slaves his bed they did ascend, 
No true succession could their seed attend.
Of all the numerous progeny was none
So beautiful, so brave, as Absalon;
Whether inspired by some diviner lust,...
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