Meaning: A manifest example of an ideal society.
Matt 5:14 Ye are the light of the world. A city that is set on an hill cannot be hid.
"We must consider that we shall be as a city upon a hill. The eyes of all people are upon us, so that if we shall deal falsely with our God in this work we have undertaken, and so cause Him to withdraw his present help from us, we shall be made a story and a byword throughout the world."
John Winthrop, A Model of Christian Charity. 1630
Also, Ronald Reagan, farewell address 1989.