"Power corrupts, absolute power corrupts absolutely," said Lord Acton. How does this relate to 1984?

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As the previous poster mentioned, the concentration of absolute power in the hands of one person or one very small group of people, leads to the corruption not just of the means of governance or in the policies of the state but actually reach out into the morals and philosophy of the society.  If you look at Stalin's assertions that the USSR was a "democratic" state it is a good example.  You might also consider the willingness of the people of North Korea to believe that Kim Jong Il and his father and now perhaps his son are in some ways deities and have the divine right to rule as another great example of the absolute corruption of absolute power.

Orwell takes all of these influences (minus North Korea of course) and uses them to structure his portrayal of Big Brother and the Party in Oceania.

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A good and interesting question. Orwell's book might be considered an extended illustration of Acton's famous quotation on the moral implications of power. Given what we learn about the Party, we can imagine that it had positive goals at one time. However now its power and its moral degradation feed one another. It reshapes and symbolically and at times literally corrupts everything (at least conceptually—think of how Newspeak destroys English). The Party has found how to extend its power into the human soul, and it is corrupting all that it touches.

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