The windmill represents innovation and progress. The animals embrace the idea of the windmill whole-heartedly, because they are told it will lead to an easier life, just as modernization of Russia would have helped people there.
The animals had never heard of anything of this kind before … and they listened in astonishment while Snowball conjured up pictures of fantastic machines which would do their work for them while they grazed at their ease in the fields…. (ch 5)
Like Trotsky, Snowball was an idealist who wanted communism for the sake of what it could give everyone, not what it could give him. He really did believe in what the windmill could offer. Yet Napoleon saw it as a way to distract everyone, and focus them on something other than what was really happening.
Napoleon and Stalin were both more interested in power. They did not care how the people suffered. They did not care about the peopole at all. The windmill, and corresponding technological advancements, could keep people busy while they got down to the real work of creating their own empires.
Animal Farm by George Orwell can be read and enjoyed without knowledge of the Russian Revolution. However, in order to recognize the subtleties he introduces and the comparisons with the Russian Revolution and George Orwell's intention of highlighting the abuse of power, readers do benefit from some background information. Orwell purposefully creates his characters in this "fairy story" to reveal traits of one or other of the instigators and influential parties involved in the revolution. For example, Snowball, based on Leon Trotsky, comes across as something of an idealist, totally committed to Animalism and dedicated to improving the infrastructure of Animal Farm. However, his major flaw is his blind acceptance that the pigs are somehow superior to the other animals and, as this acceptance that "some animals are more equal than others" is the very thing that leads to the failure of the farm, his strategic thinking and support for the masses will prove to be no match for Napoleon (Joseph Stalin) and his vicious dogs.
Snowball and Napoleon have endless debates about the benefits of the windmill and Snowball has a long-term plan which he knows makes sense and should be enough to persuade the animals. However, Napoleon is already displaying his thirst for power. With no interest in Snowball's plan, he is already manipulating the sheep so that they will heckle Snowball with the "four legs good" mantra. Snowball believes that the windmill will uphold the principles of Animalism and is a controlled and systematic way of improving life for all. It is only after he is chased from the farm that Napoleon realizes that he can use the windmill, not only to discredit Snowball, but also to gain advantage over the animals for his own gain. The animals become confused about Snowball's intentions and thus fall readily into Napoleon's hands.
Trotsky and Vladimir Lenin, and later Joseph Stalin, believed passionately in Karl Marx and his communist ideology and together they overthrew the Tsar. After Lenin's death, Trotsky eventually fled into exile (just like Snowball being chased off the farm) and Stalin introduced a five-year plan much like Napoleon when he decides that the windmill will be a good idea to increase productivity and supposedly give the animals greater freedom and comfort. This parallels Stalin's modernization projects and tighter grip on the economy and the people.
The windmill, which could represent the animals' victory and a great idea on paper, becomes nothing more than a symbol of the pigs' superiority and their ability to manipulate the animals for their own gain.