President Reagan today linked his tax and budget cutting policies with the principles for which the American Revolution was fought while speaking at a celebration of the spirit of freedom which was held on the battlefield where the British surrendered at Yorktown 200 years ago.

"The men and boys who fought on this field somehow understood that government must be close to the people and responsive to them; that if all men were free to prosper, all would benefit," Reagan said, speaking from behind a protective wall on a reviewing stand.

"Today, in our country, those concepts are threatened by the government's bloated size and the distortion of its true functions," Reagan said as he looked out on the field where more than 3,000 costumed troops representing the American, French and British armies of 1781 stood.

French President Francois Mitterrand joined Reagan in calling for an expansion of the spirit of liberty that was victorious here, but he differed from Reagan on the nature and virtue of contemporary revolutions.

While Reagan singled out the American Revolution as a unique "philosophical revolution," not merely an exchange of one set of rulers for another, Mitterrand spoke warmly of those struggling against repressive governments today.

"The aspirations of the people of the world today are just as legitimate as those of our ancestors," the Socialist French leader said. "We who govern our nations in this difficult time must understand these aspirations. Let us act so that their message is heard before it is too late," he said.

Mitterrand's words appeared aimed at the Reagan administration's lack of support for revolutionaries in El Salvador and other Latin American nations.

In brilliant sunshine, the men reenacting the Yorktown battle plus bands and honor guards from France, Britain, West Germany and the United States marched around the field and passed in review before Reagan; Mitterrand; Lord Hailsham, the British lord chancellor; Virginia Gov. John Dalton and numerous other officials including the two men seeking to succeed Dalton in next month's election. Democrat Charles Robb and Republican Marshall Coleman were seated side by side and looked unhappy at their proximity.

Before the reenactment of Charles Earl Cornwallis' surrender, the only losers today were the camp followers. Authorities barred the roughly 1,000 women and children who have camped with the Revolutionary-era units on the fields from being present for the speech making and parading.

The troops were kept standing in an arc about 100 yards from the reviewing stand during a 90-minute ceremony that led some in the ranks to give up form for comfort and sit down on the grass.

The ceremony got off to a confusing start when the announcer said a 20-by-38-foot, 13-star U.S. flag was about to be hoisted, only to have a 50-star flag unfurl on the flagpole.

Otherwise, however, it went smoothly although the two presidents left the battlefield long before the final act--the recreation of the British surrender.

Looking out at the field, Reagan said he is concerned by the "uncertainty some seem to have about the need for a strong American defense. That is a proper task for the national government. Military inferiority does not avoid a conflict, it only invites one, and then ensures defeat. We must keep this nation strong enough to remain free," Reagan said.

The president dropped one paragraph from his prepared text that made his frequently made point about the evils of big government most baldly. "Today when people tell me some of what we are trying to do cannot be done, I remember that moment at Yorktown when we achieved a miraculous success without the help of a massive and centralized government," his prepared text said.