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,
the fence
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.

The poem Smalltown Dance by Judith Wright serves to conflict with a modern belief in equality between men and women. The characters- female - are basically trapped in their existence and are represented as such. They accept " the limit of opportunity" and recall days when, as children the chance to  "run,run!" was foremost in their minds. But it is just a game of "Out of Sight," whether it is for children whom they watch now or for themselves.

It is a stereotypical image and the fact that it is centered on the women doing the laundry - an age old stereotype- allows readers to understand the women's predicament, sympathize with it and perhaps even recognize it in themselves; whether readers are like the women, thinking of "those beckoning roads to some impossible world," or a man who is unwittingly contributing to the ongoing cycle.

Society's values and norms are being questioned here but the women feel powerless to do anything. Even when they try, they "don't travel far" because it seems that, even beyond their "smalltown" the "smalltown dance" is just as evident so the only thing to do is to "close the cupboard door." 

The poet in Smalltown Dance wants to add humor to this poem by representing it as a dance. The visual picture of the sheet-folding as they stand "arms wide: together: again: two forward steps: hands meet your partner's once and twice.." together with the tempo of what sounds like a line dance is humorous. The fact that the sheet is then folded away, is confusing for the reader as the women need to make it understood that life is not a dance and there will come a time for packing your dreams "on a cupboard shelf." 

In the second verse, there is a playfulness and it's almost like a nursery rhyme as an opportunity presents its self - " ..waiting green. Run, run before you're seen." Nursery rhymes are often told when trying to lessen the seriousness of a situation. It was hardly funny for the "Old Woman who lived in a Shoe" and no less for the women trapped in their existence. They will reveal the seriousness of the situation in the third verse as even those who manage to "struggle from the peg" are limited and "don't travel far."

Finally, the women reveal the fruitlessness of the search for freedom, the main focus of this poem, and "those beckoning roads to some impossible world" are too overwhelming, adding a sadness to the poem's theme of how difficult it is to escape a mundane existence when you come from a "small town."

Wright's message is made clear in the first, second and last stanzas: it is foreshadowed in the first and second and illustrated in the last; the third stanza undergirds the coming message with experiential knowledge, the knowledge that women have that girls don't have:

reduces to a neat
compression fitting in the smallest space (stanza 1)
[...]
that glimpse of unobstructed waiting green.
Run, run before you're seen. (stanza 2)

Stanza 1 prepares for something of value that will compressed to fit in a small space: "compression fitting in the smallest space." Stanza 2 prepares us for obstructions that exist blocking that seemingly "unobstructed waiting green." Stanza 3 points out the difference between what women know and what little girls know.

women know the scale of possibility,
the limit of opportunity, (stanza 3)

Stanza 4 explains that once little girls become women, the "ancient dance" is one that traps dreams, closes them in, folds them up and closes them away in a cupboard:

And they can demonstrate it in a dance.
First pull those wallowing white dreams down,
spread arms: then close them. Fold
those beckoning roads to some impossible world,
put them away and close the cupboard door. 

Thus the message is that while young girls may dream of roads ahead and "waiting green" opportunity that is not obstructed by anything other than comforting white wash gamboling on the happy wind, women have seen the fence, have seen the obstructions to the "impossible roads," have seen that dreams, hope and opportunity are closed in a cupboard.