The toppling of the windmill the second time comes at the hands of Mr. Frederick and his men. Previously, Animal Farm neighbors Frederick and Pilkington were vying for the right to buy a stack of lumber from the pigs.
The pigs went back and forth as to who they would allow to buy the wood; getting the animals to first hate one neighbor and then the other until they finally allowed Frederick to buy the timber.
However, Frederick tricked the pigs by giving them counterfeit bills in exchange for the lumber (probably because he was mad that the animals jerked him around so much during negotiations). This was just the first step, though, in Frederick's revenge. He then showed up on the farm with backup and as part of his attack on the farm, he placed dynamite at the base of the windmill and blew it up.
In Chapter 8, Frederick pays for timber with forged banknotes, then has his men attack Animal Farm. When Frederick and his men arrive with their guns, the animals are unable to repel the attack and hide inside the barn to avoid being shot. While the animals are inside the barn, they watch as Frederick's men drill a hole at the base of the windmill. The men then fill the hole with explosives and blast the windmill to pieces. Immediately, the animals become enraged at the destruction of the windmill and overrun Frederick's men. Several animals die during the battle, and nearly every animal is wounded. Despite successfully repelling the attack, the windmill no longer exists. The force of the explosion was so great that the stones were blown to small pieces, and there are no remains of the former windmill.