Since Blessing of Fervor states that he blesses his 'allies' do they then lose that effect?
No, they do not lose the benefit of any buffs that only target your allies. That only applies when you cast the spell. So if you or one of your allies gets mind controlled, they still benefit from the spell until the end of it's duration.
If not from that, can he selectively remove the blessing from his target? Or will he need to actually end the whole spell?
Can he even end the buff without the other characters permission?
Some spells will let you dismiss them before the duration ends. These are marked by a (d) to the right of their duration. Grease for example is dismissible, while Blessing of Fervor is not. So the only way to remove it, is with dispel magic.
I'm curious as to how people would rule inspiring courage. I think that effect would end when the mind control occurs.
My character is an Oracle and cast Blessing of Fervor at the start of combat targetting himself and his four allies.
While spells are fire and forget, I'd treat the "allies" requirement just as a creature-type requirement. If the relevant status changes, the spell is negated.