Napoleon's spin on the origins of the windmill is absolutely a form of propaganda, meant to influence and deceive the other animals and promote his own agenda. By definition, propaganda is
"a form of communication that is aimed at influencing the attitude of a community toward some cause or position."
Propaganda generally uses impartial information through selective facts or even deliberate lies to bolster a position and create an emotional response from the intended audience. Napoleon takes credit for Snowball's idea when he had originally opposed the construction of the windmill. When it somehow became obvious to him that the idea had great potential for creating energy and reducing the animals' workload, Napoleon took credit for the plan. According to Squealer, Napoleon had never opposed Snowball's plans (in truth, Napoleon had called it "nonsense" and "moonshine"); and that Snowball had actually stolen the plans from Napoleon. It was a "manoeuvre" by Napoleon to get rid of the dangerous Snowball, Squealer further explained.