The ensign spoken of means the gospel and new and everlasting covenant brought through the organization of the Church of Jesus Christ of Latter-day Saints. This great message will be sent to the house of Israel in the last days,
’And the Lord will set his hand again the second time to restore his people from their lost and fallen state. Wherefore, he will proceed to do a marvelous work and a wonder among the children of men.
Wherefore, he shall bring forth his words unto them, which words shall judge them at the last day, for they shall be given them for the purpose of convincing them of the true Messiah, who was rejected by them; and unto the convincing of them that they need not look forward any more for a Messiah to come’ (2 Nephi 25:17-8).
Joseph Fielding Smith
"CHURCH IS PROMISED ENSIGN TO WORLD. Over 125 years ago, in the little town of Fayette, Seneca County, New York, the Lord set up an ensign to the nations. It was in fulfilment of the prediction made by the Prophet Isaiah, which I have read. That ensign was the Church of Jesus Christ of Latter-day Saints, which was established for the last time, never again to be destroyed or given to other people. It was the greatest event the world has seen since the day that the Redeemer was lifted upon the cross and worked out the infinite and eternal atonement. It meant more to mankind than anything else that has occurred since that day.
"No event should have been heralded among the people with greater effectiveness and received with greater evidence of joy and satisfaction. The nations should have rejoiced and welcomed it with gladness of heart, for with it came the establishment of divine truth in the earth-the gospel of Jesus Christ, which is the power of God unto salvation unto all who believe. The world had been without this gospel for many hundreds of years, ever since the great apostasy and turning away from the truth which had been established by the primitive Church.
“Following the raising of this ensign, the Lord sent forth his elders clothed with the priesthood and with power and authority, among the nations of the earth, bearing witness unto all peoples of the restoration of his Church, and calling upon the children of men to repent and receive the gospel; for now it was being preached in all the world as a witness before the end should come, that is, the end of the reign of wickedness and the establishment of the millennial reign of peace. The elders went forth as they were commanded, and are still preaching the gospel and gathering out from the nations the seed of Israel unto whom the promise was made.” (Doctrines of Salvation, vol. 3, pp. 254-5)
“Many ancient prophecies foretold that in the last days the Lord would set up an ensign to the nations, a standard to which Israel and the righteous of all nations might gather. (Isa. 5:26; 11:10-12; 18:3; 30:17-26; 31:9; 49:22; 62:10; Zech. 9:16.) This ensign is the new and everlasting covenant, the gospel of salvation (D. & C. 49:9); it is the great latter-day Zion (D. & C. 64:41-43); it is The Church of Jesus Christ of Latter-day Saints.” (Mormon Doctrine, p. 228)