We know that George Orwell's Animal Farm is an allegory (or a "fairy story," as Orwell calls it) for the real-life events surrounding the former Soviet Union before and during World War II.
From almost the instant after the animals took the farm by force from Mr. Jones, the pigs have been in control. Manor Farm, formerly known as Animal Farm, is of course Russia, and the two pigs who fight for power (Napoleon and Snowball) are representative of real figures in the country's history. Napoleon is a combination of Lenin and Stalin, though by the end he is certainly mostly a picture of the infamous Joseph Stalin; Snowball is the representation of Leon Trotsky.
Once Snowball is gone, Napoleon's rise to absolute power happens rather quickly. Soon he is the dictatorial leader of Manor Farm, and he does whatever he has to do to maintain and increase power. It is always in his best interest to manipulate the truth/facts to suit his purposes and to keep the animals subservient and docile.
One of the tools he uses to do that is Squealer, a crafty, fast-talking pig who can "turn black into white." This skill is particularly useful when it comes to any discussions about the neighbors on either side of it. Foxwood is a
large, neglected, old-fashioned farm, much overgrown by woodland, with all its pastures worn out and its hedges in a disgraceful condition.
This farm belongs to Mr. Pilkington,
an easy-going gentleman farmer who spent most of his time in fishing or hunting according to the season.
Obviously this farm is representative of countries in the West, primarily Great Britain and the U.S., and Pilkington is an amalgamation of Churchill and Roosevelt.
The farm on the other side is Pinchfield, a "smaller and better kept" farm. The owner, Mr. Frederick, was not a very nice man. he is
a tough, shrewd man, perpetually involved in lawsuits and with a name for driving hard bargains.
Equally obvious is the fact that Frederick is Hitler and Pinchfield is Germany, and we know that these two farmers (leaders/countries) despised one another.
When Napoleon gets ready to do business (sell some wood), he has to choose one of them. This is an allegory for Stalin aligning himself with one ideology or the other. Not surprisingly, he vacillates between the two farms and regularly sends Squealer to condemn one and praise the other. The animals even change their "death to" chants depending on which of the farmers is in favor at the time.
The explanation for these fluctuating positions is that Napoleon is trying to negotiate the best deal--for himself, not for the country. It has been said that the only person Stalin trusted was Hitler, and we all know how that went. What happened to Stalin in real life is what eventually happened in the novella. Napoleon finally makes a deal with Frederick, and he is thrilled with the money he has earned from the the sale of the wood.
Unfortunately for him, Napoleon is duped by Frederick who pays for the wood with counterfeit money. (For the historical parallel, see Stalin's 1939 non-aggression pact with Hitler).
Napoleon consistently places blame on and makes accusations about whichever of the farmers he is currently enemies with, and he does so by using propaganda. He clearly does not have a strong alliance with either of them and is only concerned about his own best interest in any dealings he has with them. They are merely a means to his power-hungry end.
For more analysis on this classic tale, see the excellent eNotes sites linked below.