Animal Transformation is one of the many abilities given to one who controls the Sword of Protection, She-Ra, currently Adora. This ability is used to make any animal transform, physically changing them in appearance as well as giving them abilities. The energy is of the Runestone and the sword it is embed in. The animal who was transformed accidentally was a horse who became intelligent, as well as growing wings, growing a horn and the ability to talk. Adora made a connection with the horse and they later became friends.
In the episode "Flowers for She-Ra", Adora accidentally transforms a small reptile. From this, Bow and Glimmer figure out what happened to Swift Wind, formerly known by Bow and Glimmer as "Our horse."