A- The sheep represent those who choose not to follow their ultimate purpose.
AND
B-The sheep motivate Santiago to take a risk and pursue his Personal Legend.
When Santiago observes the sheep, he reflects on how they go through life doing only what Santiago asks. They trust him to keep them fed and watered, out of danger, and make good decisions on their behalf. They are similar to those people who choose not to follow their ultimate purpose in that they let life pass by only satisfied with the necessities. Not really choosing their own path or purpose.
The sheep also motivate Santiago. After reflecting on their ability to hold him back from his adventure because of his feelings of responsibility to them, he begins to realize that they are really the way he can afford to take his journey. By selling his sheep, he can free himself easily from what keeps him in Andalusia and acquire the money he needs to begin his journey to the pyramids.
