Where It All Goes Down
England
We're all over the place in this poem, and we're not just saying that. We've got references to "ancient time," to the English landscape (it's both cloudy and green), to the factories that were a part of that English landscape in Blake's day, and to something else that can only be described as a magical place. Let's get started then, shall we?
The most important thing to keep in mind is that even though the poem is called "Jerusalem" (remember, this is not Blake's title), the poem isn't really about the Jerusalem in Israel, but rather the New Jerusalem. Still, while the poem refers to this, we don't really get a lot in terms of description, so it's there more as the speaker's goal, hope, or desire (he wants the "setting" of the world to become the New Jerusalem).
The poem is really about England, and its many different faces. There are references to a peaceful, pastoral landscape ("pleasant pastures," "green & pleasant Land") and, of course, to England's notorious clouds. While England seems pretty enough in this poem, those clouds aren't just your regular old clouds. Toss in some "dark Satanic Mills," and you have a picture of a not-so-stellar England.
The Industrial Revolution was just getting started in Blake's day and while it was responsible for many technological advancements, it was also responsible for a fair share of problems too: poor working conditions, child labor, dirty and filth, overpopulation, and all kinds of other junk you can read about right here. The "dark Satanic mills" of "Jerusalem" symbolize the Industrial Revolution. The mills, and the clouds too, are the antithesis of the green pastures that represent the other side of England.
Okay, so good and bad England—now, where does all that divine light stuff come in? Well, the speaker suggests that the divine light of the New Jerusalem once shed some, ahem, light on England's cloudy hills, and he wants that light to come again. This is where all the stuff about a chariot of fire and a burning bow comes in (it reminds us of some heavenly battlefield, of the kind described here). The speaker conjures up a very heavenly, biblical setting because that's what he wants England to look like and because it is only with divinely inspired weapons (of the kind you would see in a battle of angels and devils) that such a change can happen.