What is an allegorical novella?
The word "allegory" derives from the ancient Greek "allegoria," which combines two words "allos" ("other") and "agoreuein" ("speak publicly"). The Greek word was adopted by Roman literary critics and from Latin it passed onto French ("allegorie") and was transmitted from French into English. The meaning of allegory as a literary term is to speak about one thing overtly in order to speak about something else. Parables, fables, and animal tales, for example, all tell stories pointing to morals about human behavior. Orwell's Animal Farm is in many ways a traditional animal fable or allegory, a genre dating back to the Greek author Aesop, which tells stories about animal characters in order not to describe actual animals but to comment on human behavior. In the case of Animal Farm, Orwell is telling what appears to be a story about animals, but what is actually a critique of the Soviet Union under Stalin, with the animals standing in for historical figures and classes.
The term "novella" simply means "short novel". Imaginative works of prose narrative are called "short stories" if they use fewer than 8,000 words, novellas if they are between 8,000 and 40,000 words, and novels if they are over 40,000 words. Orwell's Animal Farm is called a novella due to its being a piece of imaginative prose narrative fitting the length criteria for a novella.
According to eNotes, an allegory is a story in which "the characters and events stand for something else." (See the reference link provided). We see this clearly in Animal Farm: on the one hand, it is a novella (a short novel) about life on a farm, told from the perspective of farmyard animals. Looking deeper, however, Animal Farm depicts some of the major political events of the Soviet Union during the early-twentieth century. Moreover, its characters are based on the some of the key players from this period: Napoleon, for example, is clearly based on the Soviet dictator, Joseph Stalin.
By writing Animal Farm as an allegory, Orwell is able to express his thoughts on the Russian Revolution and the dangers of Soviet-style Communism, more generally. Looking at the events in the novella, it is clear Orwell disliked Communism and believed Stalin used it to subjugate and oppress the working class. We see this through the fate of Boxer, the hardworking horse who is betrayed by Napoleon when he is sold to a glue manufacturer instead of being allowed to retire.