Given that throughout the album Bill Fay depicts Christian imagery, by “The Healing Day”, Bill Fay is probably reffering to the Sabbath, which is the seventh day in a week, reserved for rest and worship.
It'll be okay
On the healing day
No more goin' astray
On the healing day
Yeah we'll find our way
On the healing day
To where the children play
On the healing day
When the tyrant is bound
And the tortured freed from his pain
And the lofty brought to the ground
And the lonely rage
Ain't so far away
That healin' day
Comin' to stay
The healing day
Every battleground
Is a place for sheep to graze
When it all comes tumblin' down
All the palaces and parades
It'll be okay
On the healing day
No more goin' astray
On the healing day
Yeah we'll find our way
On the healing day
To where the children play
On the healing day