How is Animal Farm considered a satire?
The satire in Animal Farm comes in the form of its allusions to real events, such as the Russian Revolution in the animal revolt, or the banishment of Leon Trotsky in the expelling of Snowball. The book takes the real events and shows the inherent foolishness of Marxist ideology through its inevitable failure, and the rise of a dictator in pretense of "protecting" others from some unseen threat.
Between pigs and human beings there was not, and there need not be, any clash of interests whatever... Mr. Pilkington once again congratulated the pigs on the low rations, the long working hours, and the general absence of pampering which he had observed on Animal Farm.
(Orwell, Animal Farm, msxnet.org)
In order to keep their own luxuries, the pigs necessarily reduce the amount of food given to the other animals, and increase their working hours because the pigs are not pulling their own weight. Here the intention of real-life Marxism can be seen; the pie-in-the-sky dreams and good intentions always end in misery for the workers as they toil endlessly for the benefits of a few in power.