In this small town we see the random killing of an individual. The selection process is simply a matter of chance. If you are lucky, you survive. However, if you have the infamous black dot on your paper, you will be stoned. For many Jews, their heritage was a “black dot”.
Allegory: an extended metaphor in which persons, abstract ideas, or events represent themselves on the literal level and also stand for something else on the symbolic level ... and involves moral or spiritual concepts that may be more significant than the actual, literal events.... (Wheeler, Literary Terms and Definitions)
An allegorical reading most often associates "The Lottery" with abstract ideas like justice, freedom and predestination.
According to some critics, especially Judy Oppenheimer, Shirley Jackson's "The Lottery" can be read as a reaction against the Holocaust, though other critics disagree.
The mark of the black dot is represenational, though not allegorical, of the yellow stars Jews in the ghettos were forced to mark their clothing with. Jews might then be “selected” (as the "Lottery" townsfolk were "selected") to work at a concentration camp or might be “selected” to have your life ended in a gas chamber. Despite some determing factors, there was a sense of randomness to the Holocaust selection process. So in “The Lottery”, Shirley Jackson makes clear the randomness of the townspeoples' selection.
There is a representational connection, though not an allegorical one, that as we are horrified to learn of Tessie Hutchinson’s fate, we might be reminded of the horror of the Holocaust. Allegory might be clearly seen in the abstract ideas of random horror and justice versus injustice that are expressed in "The Lottery."
“The Lottery” is an allegory of the dangers of tradition.
An allegory is a story that symbolically represents something else.
In “The Lottery,” things are done the way they have always been done, even if there is no reason why. No one remembers where the rituals originated, and no one seems to know why they are important. Yet tradition is important, so they continue.
Consider two important symbols in the story—the box and the stool.
The postmaster, Mr. Graves, followed him, carrying a three- legged stool, and the stool was put in the center of the square and Mr. Summers set the black box down on it.
Neither works. They are both busted and old. Yet the villagers keep using them, because it’s tradition. This is just like the lottery itself. It is a destructive, useless practice, yet the people keep doing it.
Jackson wants us to compare the story to our own traditions, especially the destructive ones. As the reader realizes what a terrible thing happens in this village, he or she understands the danger of doing something just because it has always been done.