Witches and wizards = observant Jews (praying, studying Torah and doing mitzvos is really magic — it changes the world in a supernatural way).
Muggles = non-Jews and non-observant Jews (they don’t understand the magic of Torah and mitzvos).
The Dursleys = anti-Semites, militant atheists and anti-Orthodox Jews.
Slytherin = those for whom Torah is a deadly poison (Yoma 72b), because their ulterior motive is for power and domination rather than serving Hashem and improving their character traits.
Gryffindor = those who are brave and bold as a lion in doing Hashem’s will, fighting evil and making a kiddush Hashem.
Hufflepuff = those who are kind and humble in doing Hashem’s will, who always do acts of kindness but are not known to take the initiative to spread Judaism or lead people toward teshuvah.
Ravenclaw = those who are righteous Torah scholars but lack the bravery to intervene and push for positive changes in society (such as more unity, etc.)
Dumbledor = the greatest tzaddik of the generation.