It's an early example of a Toby Jug, proably more of a decorative piece than a functional item. The original Toby Jugs were produced by the Staffordshire potters in the 1760s.

This mug from Shandy Hall, Coxwold, a museum dedicated to the eighteenth-century writer Laurence Sterne, is connected with one of Sterne's most famous characters. Uncle Toby, a popular character ...