Milling is an action that can be performed by NPC’s and by the player at some farms and mills. It appears to be only an animation, but if you work in the mills or cut logs and sell them it will boost the economy of that certain town.
In order to activate this animation sequence, the player must activate an available mill. The character will then proceed to push the grindstone in a circle around the mill until deactivated.
It is possible that this is a placeholder for future cooking additions. Or it may just be a role-playing scene to add to the realism factor of Skyrim.