Who explained the true meaning behind Baba's strange act of grinding wheat?

The true meaning was explained to the narrator by 'the people' of the village. According to Chapter 1, after the narrator witnessed the baffling event of the flour being thrown on the village boundary, he later made inquiries. These people informed him that Baba had not been grinding wheat, but symbolically grinding the cholera epidemic that was afflicting the village. By having the resulting 'flour' thrown out at the stream on the village boundary, he effectively drove the disease away. This explanation revealed the profound, hidden purpose behind what initially seemed like a strange action by the saint.