Well, actually, this comes from the common American perception that some degree of economic freedom, rights and liberty are required to have a functioning democracy; however, if you go to Western Europe, which has a more collectivist culture and was where Orwell lived, it's a pretty common view to believe this is not necessarily the case. You see, America is the most conservative first-world country on the planet (For example, we are more or less alone in the fact that we don't offer universal health care) and one way we show it is by assuming that capitalism and democracy go hand in hand. However, if you look throughout history, you would actually find most countries which are capitalist were some sort of dictatorship or authoritarian system. For example, China (Which claims to be communist but isn't, just like the USSR), Nazi Germany, Pinochet's Chile, so on and so forth. Now, let's remember, there have really only been two different attempts at setting up a communism in a major country. These were China and the Soviet Union. They both failed, becoming corrupt dictatorships in which the people were oppressed and the money was siphoned off to the ruling classes. However, Orwell held the view that these societies failed not because of some fundamental problem in socialism, but instead because of the anarchism which communism embraced, which made the protection of a democratic system through the use of a police system impossible. In addition, he reasoned that because more countries throughout human history have been non-democratic than democratic, the USSR and China had probability standing against them.
Now, we must also draw a distinction which is not commonly made here in the States; namely, the difference between Socialism and Communism. Communism, to quote Karl Marx, founder of the philosophy, is "A stateless, classless, currency free society in which private property is abolished and resources are allocated based on need, not ability." On the other hand, Socialism is a system where "The means of production are typically owned by non-private entities and the economy is cooperatively managed." Communism is a more radical version of socialism, in which all people are equal, both politically and economically. On the other hand, Orwellian socialism accepts some sort of inequality as unavoidable while simultaneously wishing to minimize this. Some examples of acceptable inequality include stuff like a president outranking a normal person and paying people a bit more for jobs that are more dangerous or laborious.
Finally, the point must be made that socialism does not necessarily mean ignoring the individual rights of humans, and it can in fact be argued that the opposite is true. You see, democratic socialism and democratic capitalism both say that they care for human rights, and they do, but they disagree on what those human rights are. Socialists argue that freedom from the upper classes' affluence and financial influence is a right, whereas capitalists argue that freedom to earn a higher place through ingenuity and hard work trumps this right. Which side is right is up to you.
A few years of studying worldwide politics and political economics
P.S. No, I'm not one of those communist trolls that occasionally show up on here. I hold political views ranging from the center to the center-left, and I realize that the USSR was a terrible country which didn't live up to any of its ideals. I hope that this helps you to understand that the situation with Communism and Socialism is more nuanced than you'd expect.