We are led to Believe a Lie When we see not Thro' the Eye Which was Born in a Night to Perish in a Night When the Soul Slept in Beams of Light.
Blake recycled some of these lines for a poem entitled "The Everlasting Gospel"—which helps this all make more sense. The relevant part reads:
This life's five windows of the soul Distorts the Heavens from pole to pole And leads you to believe a lie When you see with, not thro' the eye That was born in a night to perish in a night When the soul slept in beams of light.
The "five windows of the soul" are the five senses. They're the way the soul experiences the world. So what Blake's saying in this other poem is the same thing he's saying here: the physical senses don't give us any real information about reality—at least not about spiritual reality.
The truth can only be beheld mystically, or poetically, through the imagination and the revelations it gives. In order to see what's really going on, you need to see "through" your eyes—using the soul and imagination that exist behind them—and not just "with" them.
Blake says that the physical eyes were "Born in a Night to Perish in a Night"—while the soul is sleeping "in Beams of Light," since it can never die and has only forgotten its true identity, believing itself to be a physical body instead of a spiritual being.
The "Born in a Night to Perish in a Night" line is cribbed from the Book of Jonah, where God describes a bush that shelters Jonah as being "born in a night to perish in a night" (in the King James Version). Blake uses it to describe everything that's part of the material world—including our own physical eyes—and not part of the spiritual world beyond. You could say that the material world is the same as the "Night" in which the physical eye exists: it's too dark for it to see the eternal realities.
God Appears & God is Light To those poor Souls who dwell in the Night, But does a Human Form Display To those who Dwell in Realms of day.
These four lines directly flow from the previous four lines. If the material world we all live in is the same as the "night" where the poor souls (human beings and other living things) are dwelling, then God appears to us (according to Blake) as the little bit of light we're able to receive. God is like the light from the sun, which makes the material world visible instead of completely dark.
But, Blake says, when you get into the spiritual world (of which Blake had visions), God doesn't appear as beams of light anymore (which are just a mild reflection of what God really is), but as the ultimate human being: Jesus (or, Jesus as Blake understood him). The "realms of day" are the eternal world—the opposite of the material night world.
Blake also creates the effect of an incantation as the poem ends—and in the four lines just before. He repeats "light" and "night" in a way that has a sort of powerful, possibly hypnotizing feel as the poem wraps up.