The exact reference to the flag reads:
"Snowball had found in the harness-room an old green tablecloth of Mrs. Jones's and had painted on it a hoof and a horn in white. This was run up the flagstaff in the farmhouse garden every Sunday morning. The flag was green, Snowball explained, to represent the green fields of England, while the hoof and horn signified the future Republic of the Animals which would arise when the human race had been finally overthrown."
Flags are ubiquitously deemed to be symbols of patriotism, loyalty, trust and respect, not only for the government or state which it represents, but for any society, organisation or group, no matter how large or small.
The flag represents the unique attributes of whichever order it represents and is a symbol of its history, ethos, fundamental principles and beliefs as well as its mission. As such, it carries with it huge symbolic significance and is, or should, therefore be treated with the utmost respect. Dishonouring a flag is equal to dishonouring who and what it represents. It is for this reason that flags are generally used during formal and ceremonial occasions.
Initially, the flag in Animal Farm represents the ideals of the animals as a collective: freedom from human domination, to fend for themselves (independence) and a general brotherhood (comradeship). The design of the flag closely resembles the flag adopted by the Communists after the Russian Revolution.
The hoof and horn are very similar to the hammer and sickle reflected on the communist flag. The most obvious difference is in the general colour of the flag. The Communist flag had a red background. The hammer and sickle represented the unification of agriculture and industry, whilst the red colour represented revolution.
it is ironic that the flag in Animal Farm represents green fields, which could signify peace and tranquillity, lives of relative comfort and hours of relaxation, as well as freedom from abuse. In reality, the animals were later exposed to the same type of totalitarian control that Mr Jones and his men exercised, when the pigs became more powerful and abused their leadership. Also, the flag later comes to represent this absolute control and becomes a tool for propaganda by the pigs. Attending meetings and performing ritualistic tasks and having compulsory assemblies actually disempowered the animals and they willingly bent to the pigs' will.
Further irony lies in the fact that the hoof and horn symbolise the "future republic of the animals when the humans have been overthrown". This is never to be, for in the end, the pigs come to represent the animals greatest enemy, so much so that:
"The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."
The flag was made from "an old green tablecloth of Mrs Jones's" upon which Snowball " had painted on it a hoof and a horn in white."
That sounds kind of generic, until you start to visualize it. Then the images fit together to become something very close to the hammer and sickle of the Soviet Union. Creating the flag was a sign that the animals had become ever more like what they hated (the ruling class, the humans, etc.). Historically, the flag symbolizes the Soviet betrayal of the workers, and the distortion of their ideals.