I found the following story from a bunch of different newspaper sources, so I'm going to mix and mash.
In May 2009, Lance Corporal William Windsor retried from his army regiment. Despite the name, it was actually not Prince William Windsor retiring, but "Billy" Windsor–a goat.
The British army has had a goat mascot for more than 200 years. I say "mascot", but the BBC was very clear in that he is "not a mascot, but a ranking member of the regiment".
This tradition started when a wild goat walked onto the battlefield in Boston and accidentally led the charge of British troops at Bunker Hill during the Revolutionary War. In fact, the royal goat herd was presented by the Shah of Persia to Queen Victoria in 1837 upon her ascension to the throne. Since that time, all goats to fill the position of Lance Corporal have be descended from that royal herd.
IT'S A GOAT ARISTOCRACY, Y'ALL. They bleat with a really posh accent. "Oh, I say, BAAAAAAAAAH, wot wot?"
"The regimental goat is considered a full member of the battalion. He marches in front of the Battalion on all ceremonial duties and is much loved by all ranks. He has a full time carer known as the Goat Major who ensures the welfare of the goat at all times."
There was a major scandal with Billy in recent years, though.
"He failed to keep in step, and tried to headbutt a drummer. The goat major, Lance Corporal Dai Davies, 22, from Neath, South Wales, was unable to keep him under control. Billy was charged with "unacceptable behaviour", "lack of decorum" and "disobeying a direct order", and had to appear before his commanding officer, Lieutenant-Colonel Huw James. Following a disciplinary hearing, he was demoted to fusilier. The change meant that other fusiliers in the regiment no longer had to stand to attention when Billy walked past, as they had to when he was a lance corporal. A Canadian animal rights groups protested to the British Army, stating that he was merely "acting the goat", and should be reinstated."
He regained his rank three months later during a parade where he proved his goatly dignity: "Captain Simon Clarke said, 'Billy performed exceptionally well, he has had all summer to reflect on his behaviour at the Queen's birthday and clearly earned the rank he deserves'".
FOR GOD'S SAKE, PEOPLE. Please tell me that you are all laughing at this behind your sleeves, that some younger-ranking military man went up to the Lieutenant-Colonel and said, "Sir, sir! I have the most hilarious idea. We should DEMOTE THE GOAT!" "My god, Jenkins, you're brilliant! You'll make general one day!"
When Billy retired due to his age, the army selected a new 5-month-old goat (also named William Windsor) who will begin "as a fusilier whilst being trained for military life. He will receive a ration of two cigarettes per day, which he eats, but will not be permitted Guinness until he is older."
"I WANT YOU!"
And in case you think this is absolutely batty, keep in mind that the UK is not the only country to have an animal serve in their military. Norwegian King Harald V knighted a penguin in the Edinburgh zoo in 2008.
This is also part of a long-standing tradition. In 1911, Roald Amundsen, a Norwegian explorer, was the first man to visit the South Pole. Upon his return, he gifted the Edinburgh zoo with one of the penguins he had brought back. In the 1970s, a Norwegian lieutenant visited the zoo's penguin colony, grew fascinated with them, and arranged for his unit to fully adopt a penguin as its official mascot.
The penguin, named Nils Olav, was given the rank of lance corporal, and has been promoted every time the Norwegian Kings Guard has returned to the Edinburgh military tattoo. "In 1982 he was made corporal, and promoted to sergeant in 1987. Nils Olav died shortly after his promotion to sergeant, and his place of honour was taken by Nils Olav II, his two-year-old near-double. He was promoted in 1993 to the rank of regimental sergeant major. On 18 August 2005, he was promoted to Colonel-in-Chief and on 15 August 2008 he was awarded a knighthood."
The penguin is now known officially as "Colonel-in-Chief Sir Nils Olav". The Norwegian army, however, does not treat him as a full-functioning member of the army as the British army does with William. Sir Nils is purely a mascot.