What does Psalm 126:2 mean?

The God-honoring Israelite people living in captivity in Babylon (2 Chronicles 36:17–21) longed to return to their homeland. Being cut off from their Promised Land was painful (Psalm 137:1–3). After seventy years, just as promised (Jeremiah 29:10), the Lord allowed them to return (Ezra 2:1). This resulted in celebration (Psalm 126:1) to see the Lord's guarantee fulfilled (Jeremiah 29:14). The people were excited to see their nation rebuilt and their culture restored (Jeremiah 31:1–3, 13).

Upon their return home, sadness vanished as the returnees laughed and shouted for joy (Psalm 126:2). Even Gentile nations were astonished at what the Lord had done for His people by bringing them home. They admitted, "The Lord has done great things for them." In the Old Testament, references to "the nations" typically use the word goyim', meaning Gentiles: those outside of Israel. The Jewish people's survival and return to their land surprised the pagan world; it sometimes made them angry (Nehemiah 4:1–4). Part of the psalmist's joy is knowing that the Lord's greatness is being seen everywhere.