A mill is a factory or plant, especially one that's equipped for grinding grain into flour. The facility is a mill, and the machine that does the actual grinding is also called a mill.
When a mill crushes and grinds grain like wheat or corn, you can say it mills flour. Other kinds of mills might mill powder or coffee — and still other mills don't actually grind anything; instead, they manufacture things like steel or paper. If someone "mills around," they wander or move about in a confused way: "The crowd mills around during the concert's intermission." This sense of mill was originally used to describe cattle.