The term 'error' was what Blake used to refer to what many call evil. He considered error to be a state and not a person. Error could be brought to light, dealt with and eliminated. Blake's goal was that every person may reach the state of internal unity and brotherhood with man.
Athough this passage at first appears to be harsh condemnation, its meaning changes a we look at it in the light of Blake's vocabulary.
InscrDante 5, (E689)
"Swedenborg does the same in saying that in
this World is the Ultimate of Heaven
This is the most damnable Falshood of
Satan & his Antichrist"
Mercy and Truth are met together, Righteousness and Peace have kissed each other
Notice what Blake is saying:
The idea of 'this World' being the 'Ultimate of Heaven' is abhorrent to him, since his whole psyche and philosophy are committed to the notion that Eternity is the only true reality. As always he wouldn't use prosaic language (as I have used) to state this. He states his reaction according to his system of thought.
'Damnable' means being worthy of complete rejection.
'Falsehood' is error - a state which is created so that the individual should not be blamed.
'Satan' is another word for error, he is the "State of Death and not a human existence."(J49:67)
Since in Blake's system, "One Error not remov'd will destroy a human Soul" (J46:11), it is merciful to remove error. Antichrist is that which opposes Christ, another error to be replaced by truth.
Blake doesn't call Swedenborg evil, he says he is in a state of error. What Blake is doing is speaking the truth in as direct and powerful a way as he is capable of.
(Thanks to Damon's A BLAKE DICTIONARY for help in explaining this)