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Orwell wrote Animal Farm as a satire on the Russian Revolution and Communism in general. The events in the book are roughly parallel to the real-life events in Russia, and so many of the characters are stand-ins for real figures. For example, Old Major represents Karl Marx, while Snowball and Napoleon represent Leon Trotsky and Joseph Stalin. Their contentious relationship is based on reality.
Napoleon was... not much of a talker, but [had] a reputation for getting his own way. Snowball was a more vivacious pig than Napoleon, quicker in speech and more inventive, but was not considered to have the same depth of character.
(Orwell, Animal Farm, msxnet.org)
Squealer is the state-controlled media complex, putting forth the party-line without comment or criticism. Jones and the other humans represent the Czars, who were overthrown, while Pilkington represents England, who negotiated with Russia while simultaneously decrying their society. In this manner, Orwell distills the historical facts into an easily-read storybook -- the subtitle is "A Fairy Story" despite having no supernatural elements -- and uses broad satire to show the failures of Communism and its ill treatment of its citizens.
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