The neighbor’s favorite saying is “good fences make good neighbors.”
The speaker’s neighbor believes that neighbors should have fences between them. He seems to think there should be separation, and he would rather stay away from his neighbor in order to avoid conflict.
He will not go behind his father's saying,
And he likes having thought of it so well
He says again, "Good fences make good neighbors."
In other words, if you have a fence between the neighbors the livestock won’t cross, there will not be land disputes, and there will be no conflict. The speaker is confused, because there are no cows to cross the line and mess up the property. He wants to know whether he is walling in or walling out.
To the speaker, good fences do the opposite of making good neighbors. The fence is an object of contention between them. It is a hassle for him to fix it, and he sees no reason for the effort because he sees no reason for the wall. It just prevents them from being social.