How does Orwell use irony as a tool of satire in Animal Farm?

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Animal Farm is set up as an allegory for the rise of Communism in Russia, and uses irony to satirize that philosophy. For example, the subtitle of the novel is "A Fairy Story," as if the story is a light-hearted fable instead of a depressing satire. This subtitle was only used by the first edition in England, perhaps because it could easily be misinterpreted by other cultures.

Another example is the representation of the classic quote "Meet the new boss, same as the old boss." The animals throw off their human master for the revolution, expecting things to substantially improve because of their commitment to working for the common good. However, because of Napoleon's lust for power, all the animals end up working harder than they ever worked under Farmer Jones; the pigs, pretending to be working equally hard, become the new humans in charge. This satirizes the concept of true revolution and the general result of change-without-difference, especially as seen in Soviet Russia.

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