Introduction to Animal Farm

George Orwell intentionally wrote this novel with Russia, Stalin, Trotsky, and socialism in mind.  Below are some definitions and explanations that will give some historical background to this insightful novel.

Socialism - Stalinism - Trotskyism
Socialism is usually defined as "common ownership of the means of production". Broadly speaking the State, representing the entire nation, owns all the means of production, and everybody is "employed" by the State. This does not mean that you have no private possessions such as clothes and furniture, but it means that land, mines, ships, etc. are collective. In the end the State is the only producer. Contrary to capitalism, it is claimed that socialism can solve the production and consumption problems. Normally a capitalist economy cannot consume all it produces. There is always a surplus production going to waste and there is always unemployment. In a socialist economy these problems allegedly do not exist. The State simply "calculates" which products are needed and then does its best to produce them.
Stalinism is based on, among other things, a number of writings by Josef Stalin, but any real Stalinist theory does not exist. The closest we get is the doctrine of "socialism in one country", with which Stalin in the late 1920s claimed that it was possible to implement socialism in one isolated country alone - as opposed to the teachings of the original Marxism.
During Stalin’s reign a bureaucracy developed along with a small clique of leaders and a terror regime with persecutions and purging of all critical elements. This is what is normally meant by Stalinism - for Orwell, as well.
Trotskyism refers to Leon Trotsky’s contribution to the Marxist theory. Trotsky did not believe that socialism could be implemented in one country alone. Neither did he believe that the revolution came in different phases - e.g. first a bourgeois revolution, then a proletarian one. The proletarian revolution had to be on the political agenda everywhere, also in less developed countries - hence the concept of the permanent revolution. After Trotsky had been driven from the USSR in 1929, Trotskyism was founded as a political movement, which among other things was characterized by a sharp criticism of the USSR.
Animal Farm
In 1943 Orwell felt that the people in England, because of their admiration for the Russian war effort, consciously or unconsciously overlooked the faults of the communist regime in the USSR. He also felt that the English communists used their position as unofficial representatives of the USSR to prevent the truth from coming out - just as they had done in connection with the Spanish Civil War.

"Indeed, in my opinion, nothing has contributed so much to the corruption of the original idea of Socialism as the belief that Russia is a Socialist country. [...] And so for the past ten years I have been convinced that the destruction of the Soviet myth was essential if we wanted a revival of the Socialist movement." [CEJL vol. 3 p. 458]

That was why Orwell wrote Animal Farm which is the story of the revolution betrayed. The tale is based on Orwell’s experiences in Spain that had subsequently led him to study power structures during revolutions, especially the Russian.
Although Orwell was an anti-communist he was not on the side of traditional ruling class, neither so in Animal Farm. Throughout the book he is on the side of the animals. But from Day One of the revolution it is clear that a new elite is about to replace the old rulers. The new elite are the pigs. It was the pig called Major  who had come up with his revolutionary theories and who had died before the revolution. After the breakout of the revolution, which happened spontaneously, the pigs assume leadership with Napoleon and Snowball in front. The pigs assume privileges and end up telling the other animals what to do and eating the best food.
As in Spain during the Civil War objective truth or history is disappearing from Animal Farm. Historical facts change according to what suits the pigs as in the case of the windmill. Originally it was Snowball's idea and Napoleon had of course been opposed to the windmill. But after Snowball has been driven away the mill is to be built after all. Those animals that vaguely remember how things were are told that actually it had been Napoleon's idea and that he had opposed Snowball for tactical reasons. Another example is the seven commandments that change concurrently with the pigs resembling human beings more and more. Eventually the seventh commandment, "All animals are equal" has had the following added: "but some animals are more equal than others.
In Animal Farm Orwell is not on the side of the humans. The pigs are the villains in the tale and they become more and more like humans. In the end of the book, pigs and humans are playing cards. When someone cheats, at row starts.

"Twelve voices were shouting in anger, and they were all alike. No question now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which." [AF p. 119]

In other words, old and new tyrannies are the same. Authoritarian forms of government, whether based on social or political castes, are basically alike and they are all a danger to freedom - as has always been claimed by anarchists. Orwell argues against the Russian revolution that was betrayed in the same way that anarchists did as early as the 1920s. The anarchist traits in Orwell were to become more pronounced and form an essential part of Nineteen Eighty-Four.