This is meant in a spiritual sense. The members of the house of Israel, the Indians of North and South America, will be brought out of spiritual captivity when they begin to understand that they are of the house of Israel and when they begin to believe in the Mighty One of Israel.
"Scattered Israel is to be freed from the captivity of ignorance and the bondage of false forms of worship. No longer are they to walk in darkness and worship gods of wood and stone or other supposed gods who have neither body, parts, nor passions. Their obscurity has ended, for now they know the true and living God who 'is their Savior and their Redeemer, the Mighty One of Israel.' Jeremiah prophetically described this day, saying: 'O Lord, my strength, and my fortress, and my refuge in the day of affliction, the Gentiles shall come unto thee from the ends of the earth, and shall say, Surely our fathers have inherited lies, vanity, and things wherein there is no profit. Shall a man make gods unto himself, and they are no gods? Therefore, behold, I will this once cause them to know, I will cause them to know mine hand and my might; and they shall know that my name is The Lord.' (Jeremiah 16:19-21.)" (McConkie and Millet, Doctrinal Commentary on the Book of Mormon, vol. 1, p. 173)