Simon has clear insight into the events on the island. He basically sees into each boy's heart. He sees Jack's motivations and Ralph and Piggy's fears. Most importantly, he understands why the boys' society is disintegrating. At the assembly when the boys are discussing the nature of the "beastie", he is the one who recognizes that the beast may not really exist, and he instead offers another possibilty; "maybe its just us." The boys dismiss Simon's observations because acknowledging their truth would mean that they have to take responsibility for the events that are happening (and which are spinning out of control).
Just before Simon is killed, he finds something of vital importance. In the chapter "Beast from the Air," a dead paratrooper lands on the island on the top of the mountain. Sam and Eric have seen this dead body moving in the wind, assumed it was a monster, and fled to the beach. Simon ventures to the top of the mountain alone, and he alone realizes that this thing the boys fear - "the beastie" - is really just a man. He returns to the encampment eager to tell the boys that they have nothing to fear, that the "beastie" of their nightmares is nothing more than a harmless corpse. However, and this is the part where his death symbolizes the death of truth, when he gets to the beach the boys are in a afraid and in a frenzy. They see Simon, misidentify him as the beast, and kill him before he can relay the important information he has discovered. After Simon's death, the wind blows, inflates the parachute, and the dead paratrooper is wafted out to sea and off of the island. Thus the boys will never have the opportunity to see what Simon discovered - the truth.
After Simon dies, taking the truth with him, fear takes over on the island. The tribe breaks apart, Jack begins ruling by fear and force, and Piggy is killed.