Till day rose; then under an orange sky The hills had new places, and wind wielded Blade-light, luminous black and emerald, Flexing like the lens of a mad eye.
The wind stampedes through fields and crashes through woods until daybreak. But when the sun comes up, it's still going.
Our speaker says that the "hills had new places," implying that the wind was so strong that it actually moved the hills around. This is a far-out example of hyperbole.
The wind now wields "blade-light." Since the wind moves the clouds, it controls how the light comes down, moving the scattered rays like blades. It's hard to say why the blade-light is "luminous black and emerald."
Maybe this is just a far-out way of describing the strange shades and effects of the light filtering through the moving clouds.
Using a simile, the speaker compares the movement of the light to the swiveling of the lens of a mad eye—it's swirling around in a disturbing way.