What is the purpose of propaganda?
The way in which I teach my classes about propaganda is that it is usually used by an established government, to sway public opinion behind a certain policy, or by a group seeking to remove a government from power, such as the Sons of Liberty and the Boston "Massacre" (five people were killed). So propaganda is usually government related. The US government had an entire official agency dedicated to propaganda to motivate Americans to support World War I involvement.
Yellow Journalism, such as that of the Gilded Age and the early 20th century, was lying or exaggerating to the public in a similar way, but for a different motive: profit.
And then there's "Muckraking" (as described by President Teddy Roosevelt), where Progressive authors and activists around 1900 exaggerated their stories of suffering and disaster to motivate public opinion towards reforms. This would include Upton Sinclair's novel, The Jungle.
"Propaganda" is really a very slippery term. It is very hard to distinguish between propaganda and persuasion. That is because the purpose of propaganda is to influence people and try to get them to hold a certain belief or set of beliefs.
Usually, when we use the word "propaganda" we use it in a negative way. When we use it this way, the purpose of propaganda is to influence people to believe something that is bad. So we tend to talk about the propaganda that Nazi Germany put out to make its people hate Jews. We tend to talk about the bad guys putting out propaganda to make people believe their ideas.