There is a place where the sidewalk ends and before the street begins (1-2)
As we read the poem, the "place where the sidewalk ends" becomes a refrain, reinforcing over and over again the idea of a land beyond the city, where our imagination is freer to wander and wonder.
And there the grass grows soft and white, And there the sun burns crimson bright (3-4)
The details in these lines show us, for certain, that we're not dealing with the literal end of the sidewalk here. If we were, the grass would be green and the sun would be yellow. Instead, we've delved into the world where everything is possible, if only we can dream it.
And there the moon-bird rests from his flight To cool in the peppermint wind (5-6)
Even though the world we've found ourselves in isn't actually a real place, we're able to picture it quite well, because of all the details our speaker gives us. The world, while imaginary, is being created for us in a very real way. Maybe real and imaginary aren't as opposite as we might think.
And we'll go where the chalk-white arrows go (14)
These chalk-white arrows appear, though we're not really sure where they come from. They take us to the place where the sidewalk ends, and we're expected to blindly follow them, without asking any questions. But, remember, we're no longer in the real world. In this imaginary world, strangers give us candy because they're just being nice, and directions magically appear in chalk to take us to the places we most want to go. Lucky us.
For the children, they mark, and the children, they know (15)
This line gives us the idea that children are the best equipped to create marvelous worlds in their minds. They haven't had day jobs or had to scrounge to pay the rent, they have never driven a car and maybe never traveled very far. Yet it's their unfettered imaginations that can take them to worlds that some adults can no longer access – like the magical place where the sidewalk ends.