In “Dover Beach” by Matthew Arnold, what does the speaker mean when he says that the “Sea of Faith” is retreating?

In his lyric poem "Dover Beach," Matthew Arnold is lamenting the fact that the world, however beautiful it may seem, is ultimately devoid of certainty and peace, particularly as "The Sea of Faith" has now begun to recede from the shore. In the final stanza, Arnold describes humanity as "on a darkling plain" "where ignorant armies clash by night." Arnold feels that the solid basis of religious faith, upon which people once depended, has begun to ebb away. It is useful to understand the context for Arnold's poem: he published Dover Beach in 1867, less than a decade after Darwin's Origin of Species sparked debate globally over where life began and why we are here.
Once, Faith represented a "bright girdle" which supported and controlled society. Now, Arnold is saying, people can no longer have the "certitude" they once had, as competing points of view are being expressed, and the world of science is beginning to diverge from that of religion. In "Dover Beach," he presents this as a troubling turn of events, leaving people "swept with confused alarms," rather than safe in the understanding that faith in God is the only possibility, a truth from which "peace" could be derived.

The speaker means that he is always painfully aware of the gradual diminution of religious faith throughout the Western world. He uses the retreating waves at Dover Beach as an extended metaphor, or symbol, of that withdrawal. The image is appropriate because the waters he is looking at are retreating with the tide. Like the tide, the retreat of religious faith is vast and unstoppable. Arnold is obviously disturbed by society's loss of religious faith because he dreads the consequences. He is implying that everything in human civilization depends on religious belief, so human civilization is in serious danger. If people believe in God and believe that God has established laws to regulate human behavior, then if they stop believing in God in alarming numbers, they could be headed down a slippery slope.

The Sea of Faith Was once, too, at the full, and round earth’s shore Lay like the folds of a bright girdle furled. But now I only hear Its melancholy, long, withdrawing roar, Retreating, to the breath Of the night-wind, down the vast edges drear And naked shingles of the world.