In this scene, Freder, the wealthy son of the city's ruler, goes into the undercity for the first time and sees the plight of the workers. After witnessing an accident, Freder sees the massive machine seem to transform itself in Moloch, a pagan god that demands human sacrifice.  This scene is a good example of fears in the early 20th century that factory work had become increasingly dehumanizing, turning workers into little more than parts of a machine.
Thank you to whoever first posted this clip. I have reported it for my students.