When Yin reaches its climax, it recedes in favour of Yang, then after Yang reaches its climax it recedes in favour of Yin. This is the eternal cycle. The dots inside the white and black halves indicate that within each is the seed of the other. Yin cannot exist without Yang and vice versa.
The ideal state of things in the physical universe, as well as in the world of humans, is a state of harmony represented by the balance of Yin and Yang in body and mind.