what is the significance of this quote to the play as a whole? "Travelers ne'er did lie, though fools at home condemn 'em."

The island represents the pastoral in this play. Here things are said and discovered that would not be in the temporal world. Sebastian and Antonio are remarking on the fantastical things found while travelling. They are in fact commenting on how they see things clearer although in a romantic sense. It is the fools at home who are burdened and blinded by their reality that can't see beyond their narrow confines.