"There are two theories about how the world works and each is based on a fundamental assumption about what the world is. There's the scientific theory that says that the world is tiny packets of matter squealing along through empty space at close to the speed of light and subject to a certain set of interlocking laws. That's what science tells us the world is. Another theory and which to my mind is a much more appealing and even intuitively correct theory, is that the world is language. The world is made of language. We can say that the world is composed of little demons doing calisthenics each one the size of a pissant's eyebrow, or or we can say that the world is made out of wave-mechanical packets of matter flying along at the speed of light but notice that what we get each time is words." - Terence Mckenna
I've always loved this quote of Terence's, perhaps because this idea about the significance of language, related to our conceptions about reality, has a very intuitive quality to it and suggest a certain conundrum. That being, that our articulations about what the world is, are bound by conceptualizations formed out of words, which being themselves relative in nature, are mere representations which cannot actually reach the source of what they are representing. The word "Apple" is not in itself an apple. Likewise whatever words we use to describe the world or how it works will fall short of their target.
"The world is made of language" is perhaps not entirely accurate or complete. It might be better to say that the world, which most of us live in and experience, is built out of our conceptualizations about reality, which are forms of limited knowledge and thus bondage, and are constructed out of the matrix of language. This is exactly what the fourth sutra of the Shiva Sutra's implies - jñānādhiṣṭhānam mātṛikā - The matrix of language (mātṛikā) is the source (ādhiṣṭhānam) of limited knowledge (jnana). Sutra two - jñānam bandhaḥ - suggest that limited knowledge is the source of bondage.
The importance of language is something which is reflected in the Tantric tradition in it's consideration of the different levels of speech. What is a thought before it has become articulated within the discursive mind? Before it is translated, through our syntactical filters into something we perceive as being audible, what is it and where is it? Isn't it peculiar that we all think in a particular language; a language which we were taught to use, indicating that prior to being shaped by the particular rules governing a specific language, that thought exists as something else; a raw impulse rising up from somewhere deep within us. Tracing thought back to its source in this way can be used as a technique for reaching a transcendent condition; by recognizing that "I already know what I want to say before it is sounded by the voice in my head", I can, if my attention is firm, catch hold of that raw impulse, and attain its source, the very ground of Being.