The content of the poem uses the laundry dance as a metaphor. So while the title links to the laundry dance, that link is only the pathway to the link to the greater idea for which the dance of folding sheets is a metaphor.
That larger idea is that dreams and aspirations and the ability to run free in a wider world "of green" opportunity is folded and put away in exactly the same (metaphorical) way that sheets are folded and put away: as each girl there grows up and learns to fold sheets, she also learns that there is no way for her to escape and run out into the broader world to do greater things with her life.
So just as she turns her back on the folded sheets tucked into a cupboard, she also turns her back on her dreams and desires for something greater. Thus the title links to the deeper content and meaning of the poem by metaphorically representing the dreams and aspirations of childhood that are laid far away in womanhood.
"That is an ancient dance," the folding of sheets that women do under the clothesline, writes Judith Wright. The motion of folding them from underneath is a back and forth one in which hands meet, just like in squaredances, dances which are usually held in small, rural towns.
While the smallness of the town in which the speaker lives is not implicitly stated, there are words suggestive of the limits and lack of opportunity that characterize such places:
But women know the scale of possibility,
the limit of opportunity,
how little chance
there is of getting out.
Thus, the routine of laundry, hanging it and taking it down is repetitious and meaningless like a smalltown dance, after which everyone returns to the routine of living without dreams and only closed cupboards, just as the poem's speaker does.