It's definitely based on Penny's farm. However, that song is a pretty basic depression era song. Dylan's lyrics are more of a declaration of independence from his former musical ideals and the people who saw this as "pure" music. So it's pretty cool that he performed that song the first time he ever played electric on a stage, and at the Newport Folk festival no less.

In reply to this comment by highdileeho:
try to find "the bently boys": down on penny's farm. Great original, from wich Dylan kinda "borrowed" re-arranged and formed maggies farm. The only reason I believe dylan stole the song is because the lyrics imply the same metaphor and values. The original is a little better. Not trying to troll, just saying, check out the original. Its an amazing song....I found a link to the song: http://www.youtube.com/watch?v=5_9_kp8HPfA

Dylan's performance of Maggie's Farm at the 1965 Newport Folk Festival is now on iTunes.