I think He's describing how much worse the real world is too his Nightmares, because after describing all these events, He goes on to say:
"while all this was happening, I was fast asleep
With a very foolish nightmare and memories I won't keep",
so I think he's trying to describe how "That the hands of human nature had surely come to blows",and the real world is actually worse than the one he Imagines while he is asleep.
I think He's describing how much worse the real world is too his Nightmares, because after describing all these events, He goes on to say: "while all this was happening, I was fast asleep With a very foolish nightmare and memories I won't keep", so I think he's trying to describe how "That the hands of human nature had surely come to blows",and the real world is actually worse than the one he Imagines while he is asleep.