It is a fact that Snowball, one of the pigs on Animal Farm, did fight bravely in the Battle of the Cowshed which is described in chapter four of George Orwell's Animal Farm. Perhaps it is true that Napoleon does not know this first-hand because he was hiding in the barn during the entire battle, but it is nevertheless true. He is given the designation of “Animal Hero, First Class” for his bravery.
In chapter five of the novella, Snowball has been ousted from the farm by Napoleon, who is now the sole leader of the farm. He maintains his control partly through the dogs he trained and hid and partly through the animals' willingness to believe what they are told by Snowball, the pig that can "turn black into white." When the animals are upset about Snowball's violent departure, Squealer talks to them about many things. One of them is the fact that Squealer was not a hero in the Battle of the Cowshed as they had all once supposed. He says:
And as to the Battle of the Cowshed, I believe the time will come when we shall find that Snowball's part in it was much exaggerated.
In chapter seven, things are starting to go very wrong on the farm, and Napoleon (through Snowball) needs someone to blame. The easiest target, of course, is someone who is not there to defend himself, and Napoleon begins to blame everything on Snowball. In addition, the animals are supposed to believe that Snowball actually plotted against them, acting in collusion with the farmers who came to take back the farm. The animals do not want to believe this about Snowball, and even Boxer, whose motto is "Napoleon is always right," is convinced that Snowball was loyal to Animal Farm during the Battle of the Cowshed.
In chapter eight, the last blow is struck. Once again Napoleon needs a distraction from the consequences of his poor judgment and leadership, and Snowball is the target.
The animals now also learned that Snowball had never, as many of them had believed hitherto, received the order of "Animal Hero, First Class." This was merely a legend which had been spread some time after the Battle of the Cowshed by Snowball himself. So, far from being decorated, he had been censured for showing cowardice in the battle.
It is a lie, of course, but the animals come to believe it.