Tao Yuanming, a famous writer of the Eastern Jin Dynasty, wrote the well-known essay Peach-Blossom Spring. In it he tells a story which goes like this: A fisherman happened to come upon a place called Peach-Blossom Spring. Squeezing through a cave, he found a village, the residents of which were descendants of refugees from the Qin Dynasty. It was a paradise isolated from the outside world, without exploitation or oppression, and everybody living and working in peace and contentment. The fisherman left the villagers and went home. But he could never find the place again.
This idiom is derived from the above story, and is used to mean an isolated, ideal world.