in Macbeth how is the allegory literal and political?

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First, let's begin with a working definition of allegory. An allegory is a story illustrating an idea or a moral principle in which objects take on symbolic meanings.

Thus, if you were to take each act literally, there would be a moral lesson in each section attached to an object: swords, witches' cauldrons, blood, woods, etc., to name a few. You could consider the allegorical objects this way: Swords = power, cauldrons = prophecy/fate; blood = guilt; Woods = Revenge/Hidden danger.

As a political allegory, Macbeth in part serves as a warning to potential despots. As critic Stephen Greenblatt has observed, "There is always someone who escapes the murderer's net, someone who poses a threat seeks to redress an injury or simply remembers what it felt like to be free and unafraid." Macbeth is more interested in power than in loyalty. In each subsequent act, we find that Lord Acton's observation: "Absolute power corrupts absolutely" is true. Macbeth eventually will stop at nothing not even his own beheading, to hold on to power:

I will not yield
To kiss the ground before young Malcolm's feet,
And to be baited with the rabble's curse...
I will try the last. (Act 5.11.27-29 & 32.)

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