In this excerpt, Orwell employs irony primarily through the contrast between the animals’ initial dreams and the reality they face under Napoleon’s leadership. The animals once aspired to enjoy luxuries, as inspired by Snowball’s visions, but now those dreams have been dismissed as contrary to Animalism. Napoleon's assertion that "the truest happiness... lay in working hard and living frugally" highlights the stark disillusionment—the animals expected to achieve a better life through their rebellion, but instead, they are deprived of the very luxuries they once dreamed of.
Therefore, the most fitting analysis of irony in this context is: The text shows that the animals expected a different outcome than the reality they are facing.