A sodden farmer who doesn't care about the conditions of his labor force is in control of a place called Manor Farm. This master is rivalled in his influence by an old pig who gathers the animals of the farm (the labor force) together to inspire them to think about how things should be, how things could be changed on the farm, and to think about their rights.
The power dynamic is clearly defined and power is seen to be held by the human master of the farm, Mr. Jones, and the animals are identified as a proletariat, an exploited workforce.
Like so many revolutions, the beginning of the animal revolt is the result of the idealism of the Old Major, who simplifies the matter and who does not understand that good and evill are not sharply outlined. Just as T.S. Eliot once wrote, "Between the idea and the reality....there lies the difference." Old Major lights the hearts of the animals with his ideas, but the reality to come in subsequent chapters is not what he has planned.
In the first chapter we see the "seed" or the germ of the rebellion which dominates the rest of this powerful novella. The prophetic dream of Old Major, and the vision that it gives the animals of an alternative reality and the kind of life that they could have if they were free from the tyranny of man, is something that inspires all of the animals to join forces and work together to overthrow the yoke of power that man has over them and to start their own alternative society.
Animal Farm opens in the setting of the farmyard at the chicken coop where the intoxicated Mr. Jones of Manor Farm locks the chicken coop but forgets to close the "pop-holes." This setting and action (or neglect of action) is integral to the development of the story because the animals are introduced; given voices, personalities, reasoning ability, in general anthropomorphized; and given the chance to present their problem through the agency of the "old Major, the prize Middle White boar," who had a dream to tell about.
The first chapter concentrates primarily on the meeting called by Old Major, who has had a dream in which "man has vanished" and animals rule the earth. He calls for a rebellion, in which animals will overthrow humans and control their own lives. Man is the enemy, Old Major assures them, and the animals must band together in order to create a new order for themselves.
The setting of the first chapter is Manor Farm. Essentially all of the action in this chapter takes place inside the barn. The basic idea in this chapter is that a pig named Old Major is going to tell the other animals about his vision for a better society in which animals are not going to be oppressed by humans. Instead, the animals will live together in harmony under their own rule.