Theory:

     Not long after that, the good old man dreamed again, and the spirit of the dog spoke to him, telling him how the wicked people had burned the mill made from the pine tree. “Take the ashes of the mill, sprinkle them on the withered trees, and they will bloom again,” said the dog-spirit.
 
     The old man awoke and went at once to his wicked neighbour’s house, where he found the miserable old pair sitting at the edge of their square fireplace, in the middle of the floor, smoking and spinning. From time to time they warmed their hands and feet with the blaze from some bits of the mill, while behind them lay a pile of the broken pieces.
Explanation:
 
The good old couple had no knowledge of the mill being destroyed and burned down by their neighbours. The good old man had another dream in which his pet Muko appeared again. The spirit of Muko spoke to him in his dream and informed him about the incident, informing him how the evil people had set fire to the mill he had made out of the pine tree. Muko also advised its owner to collect the ashes of the mill from his wicked neighbours and sprinkle them on the withered trees. It assured that the withered trees would bloom again.
 
The good old man awoke from his sleep and decided to do as per the instructions given by Muko's spirit. So he immediately went to his evil neighbour's home, where he noticed the wicked old couple smoking and spinning in the middle of the floor, near the fireplace.
 
They warmed their hands and feet with the flame from some mill parts from time to time, while a pile of broken pieces from the mill remained behind them. The wicked pair did not bother to hand over the borrowed mill to their kind neighbours.
 
The bad couple was still unaware that their previous sins and selfishness had resulted in their activities becoming a failure.
 
Meaning of difficult words:
  
S.No
Words
Meaning
1.
Sprinkle
To scatter in drops or particles
2.
WitherTo become dry
3.
MiserableVery unhappy or uncomfortable
4.
PileA lot of something
Reference:
National Council of Educational Research and Training (2007). Honeycomb. The Ashes That Made Trees Bloom (pp. 55-63). Published at the Publication Division by the Secretary, National Council of Educational Research and Training, Sri Aurobindo Marg, New Delhi.