The elephant is an important symbol because it is a possible hazard. How?
The elephant could easily kill people and cause great damage and losses to property when he gets loose in the bazar. The elephant's "escape" is akin to the political problems of the Burmese who are under English control.
The analysis of themes here at eNotes explains the hazard the elephant causes this way:
"Order prevails when the mahout (elephant handler) ties up the elephant and keeps him under control; disorder prevails when the elephant slips his keeper and ravages the bazaar. A policeman, too, is a keeper of order, which is why Orwell’s narrator cannot avoid the unpleasant duty of shooting the elephant. Not to do so would be to condone disorder and provoke it even further, by appearing to be unwilling to carry out official violence against the disruption of daily affairs. Disorder is a type of violence within the daily round, dissolving the habitual peace. Disorder-as-violence can only be halted by a supplementary administration of violence, and even the narrator admits that this supplement is morally dubious, no matter how practical or necessary it might be. Disorder-as-violence appears on many occasions directed against the British, as when random Burmese spit betel juice on passing European women, as when Buddhist priests laugh spitefully at the narrator, as when the umpire on the playing field looks conveniently the other way while a Burmese player fouls the very same narrator. But this disorder also quells a possibly greater disorder, that of general rebellion against the British. Order, it appears, calls for a strange and paradoxical use of disorder to satisfy rebellious urges which would otherwise grow strong and run amok like a rogue elephant."