What did the mayor mean when he said:"what are you laughing about? You are laughing about yourselves

I think the whole town was swindled by greed. The low-level clerk obviously had his way with the whole town and any corruption is a reflection of the whole town more than the inspector. After insincerely proposing to the governor's daughter, Hlestakov flees before his true identity is discovered. The townspeople do not discover their mistake until after he is long gone and moments before the announcement of the arrival of the real government inspector.The Government Inspector ridicules the extensive bureaucracy of the Russian government under the tsar as a thoroughly corrupt system. Universal themes of human corruption and the folly of self-deception are explored through this drama of Russian life. The governor's famous line, as he turns to address the audience directly, "What are you laughing at? You are laughing at yourselves," illustrates this theme, which is summed up in the play's epigraph, "If your face is crooked, don't blame the mirror."