Why do the animals fail to recognize how things are changing as the time goes on, in Animal Farm by George Orwell?

There are two major reasons that I would give for
this.

First, the pigs are the ones who control the
information that the other animals get.  By doing so, they control what the other
animals think they know.  Most of the animals, for example, cannot remember what the
commandments used to be and so they do not really notice that they are changing. 
Similarly, Squealer shapes their reality with all his statistics and such.  The animals
do not know enough to realize that they are being manipulated.  So one aspect of this is
that the pigs are controlling the way that the animals perceive
reality.

Second, most of the animals are just not
interested enough to pay attention.  They are (like Boxer) totally dedicated to the
revolution.  Or they are just interested in how things are in their own lives.  In other
words, they are not interested in critically assessing the way their society is
going.

I should add one thing.  Later in the book, they do
notice that some things are going wrong.  But then the pigs come up with a new strategy
-- repression.  With all the killing and such, the animals come to be afraid to disagree
with Napoleon.

So part of it is that the animals are afraid
to speak up and part of it is that they (for the reasons I mentioned above) don't notice
the changes.