Most of the animals in this work are shockingly ignorant and heartbreakingly gullible. They are too quick to believe what they are told and too easily miss what is really going on. Orwell, in very simple terms, shows us how political and social oppression can occur step-by-step under people's (or animals') noses. The pigs make each little move in the slide toward tyranny look reasonable: of course, they need better food, of course, they need to sleep in a house, why shouldn't they train the dogs, etc. Why not change a word here or there in a slogan, especially to make it easier to remember? Why not deal with the humans? Meanwhile, they are getting a tighter and tighter grip on power, to the point that when the other animals wake up to what is going on (at least those few who do) it is too late.
The sheep are the best representation of a large mass of ignorant people who can be easily manipulated to support whatever those in power want, even if it works against their own interests. Every time some of the other animals start to speak up and push back against the pigs, you can count on the sheep to start their mindless chanting of "four legs good, two legs bad," drowning out all reasoned discourse. Orwell shows how keeping a large group in ignorance supports oppression.
Orwell also shows the problem of bystanders. When the hens take a principled stand about keeping their eggs, none of the other animals know how important it is to support them, making it easier for Napoleon to crush their rebellion.
Orwell, of course, wants us to apply this fable to our own lives and political situation. He doesn't offer any explicit answers, but he does warn us to be very careful with how we use our language, where we place our trust, and with remembering that those in power don't necessarily have the interests of the majority of people at heart.