What does the dashboard icon that looks like a fan indicate on 1996 ford mustang gt?

That's the cooling fan indicator light. It means the engine cooling fan is running. On some Mustangs, it might only illuminate when the fan is *forced* on (e.g., by the A/C or an overheating condition), while others might have it illuminated whenever the fan is actively cooling the radiator. If it stays on constantly, or comes on at unusual times (like when the engine is cold), it could indicate a problem with the cooling system.