In chapter 5 of Animal Farm, Snowball's proposal of building a windmill to use electricity to give the animals more leisure time, as well as his excellent oration skills when proposing the idea in meetings, is extremely threatening to Napoleon. When the meeting to finally decide on the project seems to be swaying in Snowball's favor, Napoleon calls on his dogs to chase Snowball off the farm and declares that important decisions will be made by the pigs from now on, using Squealer's persuasive rhetoric (and the threat of his dogs) to get the other animals to follow along.
This is a critical part of the story because it shows how Napoleon's thirst for power, which has previously been kept somewhat in check is out in full force. It also shows his methods, a combination of controlled rhetoric through Squealer and brutal force by dogs loyal only to him. Snowball's exile foreshadows further brutality from Napoleon and danger for the other animals. It also begins the raising of the pigs above the other animals, doing away with the illusion of equality.
This part of the story is also important because of its specific ties to the young Soviet Union. Napoleon's ousting of Snowball mirrors Stalin's ousting of Trotsky and subsequent seizure of control of the country. Similarly, Lenin and other Soviet leaders felt that it was necessary to use modern technology to advance the Soviet Union properly. Like Napoleon, Stalin was against these ideas at first, but changed his position after becoming dictator.
Snowball's exile from the farm is a critical point for both character and plot development, as well as for historical reference.
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