The poem is only three short lines, but it holds a small, sad joke. A sand castle, the kind built on a beach, sits under a beautiful moon. The speaker notes that the moon is "fine," yet the castle has "no windows / to have it." In other words, the moon is shining right there, and the castle has no way to take it in.
The title, "Oversight," plays on two meanings. An oversight is a mistake, a thing someone forgot to include, and here it's the builder's failure to give the castle windows. But "oversight" also hints at seeing over or looking out, which is exactly what the castle can't do.
The mood is gentle and wistful, with a touch of humor. The speaker seems to feel a quiet pang over something lovely going unseen, and perhaps over how fragile and incomplete our small creations are. The castle won't last the tide anyway, which makes its missing windows feel even more poignant.