O'Brien's words help to highlight the world Orwell has created when government controls both the public and the private realm. A setting which eviscerates personal space in favor of public and governmental control, the notion of seeking to replace one's humanity with an imaging of the state is brought out in O'Brien's line. The idea of the state taking individuals and creating them as drones, or extensions of the political self is one where individual voice and popular sovereignty have been overtaken in the name of security and political conformity. The other idea present in the line is the notion of external control. When individual freedom and autonomy are gone, something has to fill the void and in Oceania's case, that would be through political control and domination.
O'Brien speaks this line to Winston when Winston is being tortured, but it is not only true of people who are being tortured. In fact, everyone in the society is squeezed empty and filled up with the Party.
In this society, there is very little room for personal feelings, thoughts, or emotions. They are all squeezed out of people by the Newspeak, by the spying, by the Two-Minutes Hate. All of these things make people empty of their own feelings. Then, in similar ways, the Party fills people with what they Party wants them to think and feel. By doing this, they are able to control what people think, which is the ultimate form of control.
Government control over every aspect of the lives of its citizens is the major theme of 1984. They even want to control people's thoughts. This quote refers to the fact that they will do anything and everything (including torture and deprivation) to squeeze any amount of rebellion, resistance, or self-will left in Winston until he is willing to be controlled by them and be a mindless follower of Big Brother like everyone else.