Considered to be one of the most silly series-enders in history, Fall-Out blows up the village to the tune of "All you need is Love" and "Dem Bones". Although I'd had preferred a different musical score, "Fall Out" is a good demonstration of the fact that the Prisoner is meant to be understood figuratively not literally.
Anyone that stills sees the Prisoner as a spy genre or action series will be in for a great surprise and disappointment. On the other hand, the episodes leading up to "Fall Out" and its precursor, "Once Upon a Time" attempt to slowly cozy the viewer up to the idea that the ending of this series will probably be symbolic in nature.
The fact that Number 1 is McGoohan is probably meant to illustrate the simple idea that we create our own prisons. As members of a democracy, it is us, in the end, not our governments that are responsible for state atrocities and miscarriages of justice.
The final scene where Number 1 is revealed is the only time in the series that McGoohan's eyes are not in shadow, making him not immediately recognizable as being the twin of Number 6. Of course a copy of 6 was also seen in "The Schizoid Man" which was probably not intended to be related in any way to this episode.
Another great symbol is Number 6 et al escaping from the village in a prison cell.