Jerusalem
Jerusalem is all over Blake's poetry. It's literally everywhere. For example, the last illuminated book Blake wrote was a massive poem called Jerusalem (not to be confused with the little guy we're working with here). He talks about it in Milton (the poem with which "Jerusalem" was first printed) a whole lot, and talks about it even more in what is perhaps his densest work, The Four Zoas (not published during Blake's lifetime). If you want to get a feel for just how much Blake talks about Jerusalem, go here and type in the word Jerusalem (the site is a concordance, and will show you every occurrence of the word in Blake's work).
In this poem, Jerusalem refers to the New Jerusalem of the Book of Revelation (21:2), a special, holy city that descends from the sky to serve as the home of all the true believers in God for eternity. In "Jerusalem," it's pretty much a symbol of perfect peace and harmony. The speaker wants to get rid of all the "dark Satanic mills" and replace them with a much happier place: Jerusalem. In most of Blake's poetry, this is what Jerusalem often symbolizes—in one form or another.