The speaker recalls meeting a traveler from "an antique land." This antique land is Egypt. Ozymandias is the Greek name for Ramses II, the most celebrated pharaoh of the ancient Egyptian empire. This traveler tells the speaker about the ruins of a statue. Two huge legs of the statue remain but no body ("trunkless"). The other piece of the statue that still remains is a face (visage) half buried in the ground. It is the face of Ozymandias/Ramses II. The face has a sneer: a look of condescension. The person who sculpted the face knew Ozymandias's passion. The sculptor knew the pharaoh's self-glorification. So, it is the sculptor's hand (in sculpting the statue) that mocked the passions of Ozymandias. In other words, the sculptor uses this "sneer" to show the power but also the selfishly indulgent attitude of the pharaoh.
There is an inscription on the statue of Ozymandias proclaiming his greatness. He calls upon people to look at his "works." These are statues and monuments such as this one in question. Ozymandias had these monuments built so that his greatness would last forever. But the statue has eroded. Half of the sneering face is buried and the remains of the statue are in ruins. This shows that fame and power are fleeting. And with poetic justice, the mockery of a smile is all that's left of the pharaoh's face.
This poem itself is a work of art, like the statue. Shelley considers the notion that all art is fleeting: even this poem. One question that stems from this notion is whether or not nobler art lasts longer than tributes like the statue.