Pulling out his keys, Mr. Wonka says that this is one the most important room in the factory. It’s also very beautiful, because Mr. Wonka can’t stand ugly factories. He warns the children to stay calm and then pushes the door open. The sight in front of them is spectacular: there’s a beautiful valley, with meadows and a brown river. There’s a waterfall in the river, and below the waterfall, there are huge glass pipes that extend up into the ceiling. The pipes suck up the muddy water. There are trees and flowers alongside the river.
It's significant that although the characters are in a factory, this room doesn’t look like one would perhaps expect a factory to look. Instead, it’s a natural haven of sorts in the middle of a city. Beautiful scenery isn’t something that most people would expect to find in a factory, showing again that life is more interesting when people keep an open mind and can surprises like this.
Mr. Wonka points to the river and explains that it’s all chocolate—enough to fill every bathtub and swimming pool in the country. The pipes carry the chocolate to the other rooms. All the children and their parents are too shocked to speak. They just stare as Mr. Wonka explains that the waterfall mixes the chocolate—the only way to mix chocolate properly is by waterfall. Then, he explains that all the grass, trees, and flowers are edible. Everyone picks a blade of grass (except Augustus, who picks a handful). Charlie whispers to Grandpa Joe that it’s wonderful, and Grandpa Joe agrees.
This first sight in the factory impresses everyone to the point of speechlessness. Awe, this suggests, can in some cases transcend class boundaries—the other kids are just as awestruck as Charlie, even though they presumably have the money to see spectacular things more often. Noting that Augustus picks a handful of grass, rather than a single blade like everyone else, reiterates that he's greedy and selfish. He thinks only of himself and of his own pleasure, rather than following instructions.
As Mr. Wonka encourages his guests to sample all the candy in the room, Veruca Salt lets out a scream. She points to a small person down by the river. Charlie sees multiple small men, and soon, everyone is asking questions about the people by the river. The little men are about the size of dolls. One points to the children and says something to his fellows, and they all laugh. Mr. Wonka says that the tiny men are real people called Oompa-Loompas.
Going forward, it’s important to keep in mind that in this passage, both the narrator and Mr. Wonka refer to the Oompa-Loompas as people, not an entirely different species. This factory visit isn’t just going to introduce the children and their parents to new and fantastic candies—it’s also going to show them that humanity comes in all shapes and sizes.