Coketown is significant as the face of the utilitarian philosophy taught by Gradgrind and despised by Dickens. If society decides it will most value "facts, facts, facts," "the greatest good for the greatest number," and calculation of profit and loss, it will end up looking like Coketown, a dismal, ugly, polluted town of factory chimneys with "a black canal in it, and a river that ran purple with ill-smelling dye."
Coketown is the dystopian reality Dickens hopes England can avoid spreading any farther than it already has. Through it, he critiques the abuses of industrialism, from the long hours of the workers who are dehumanized into little more than machines to the dehumanizing effects on Gradgrind's children of their utilitarian education. His children end up miserable as adults for putting money ahead of all else.
In contrast to Coketown is Sissy Jupe's world of the circus, which symbolizes imagination, creativity, whimsy, and pleasure. In this world, which Gradgrind excoriates as a waste of time and resources, the human soul can expand and experience the pleasure of imagining colorful and rich alternative worlds. Though Gradgrind believes Sissy is ruined and worries about her influence on his own children, she ends up the salvation of his family with her firm moral compass, vivid imagination, loving heart, and compassionate nature.
Coketown is a cautionary setting: don't let this way of life spread any farther, Dickens is warning.