Fairy tales, despite being aimed at children, nonetheless contain important adult themes. As such, they are a useful vehicle for conveying moral messages. There are quite a few fairy tale elements in Animal Farm, from the use of talking animals to the widespread belief in the existence of Sugarcandy Mountain. But whatever elements of the fairy tale he chooses to employ, Orwell is always making a very serious point. The form of the book may be that of a fairy tale, but the substance assuredly is not.
There's also something about the whole project of Animalism—meant to reflect Communism—that makes it seem as if it could only really happen in a fairy tale. And yet, when denuded of its allegorical trappings, the events at Manor Farm eerily—and deliberately—parallel those in the Soviet Union under Stalin.
Animal Farm is a fairy tale in that it has all the outward characteristics of a story told to children. But internally, in its themes, characters, and various plot developments it is very much a fable for grown-ups. In other words, the outer shell of the story is a fairy tale which contains the kernel of a withering indictment of Communism. Orwell clearly felt that the fairy tale form was a more effective means of making his political point than a straightforward polemic or essay.