An important word in this verse is mukta-liṅgaḥ. Mukta means "liberated," and liṅga means "the subtle body." When a man dies, he quits the gross body, but the subtle body of mind, intelligence and ego carries him to a new body. While existing in the present body, the same subtle body carries him from one stage of life to another (for example, from childhood to boyhood) by mental development. The mental condition of a baby is different from that of a boy, the mental condition of a boy is different from that of a young man, and the mental condition of a young man is different from that of an old man. So at death the process of changing bodies takes place due to the subtle body; the mind, intelligence and ego carry the soul from one gross body to another. This is called transmigration of the soul. But there is another stage, when one becomes liberated even from the subtle body; at that time the living entity is competent and fully prepared to be transferred to the transcendental or spiritual world.
The description of the bodily symptoms of Śrī Dhruva Mahārāja makes it apparent that he became perfectly fit to be transferred to the spiritual world. One can experience the distinction between the subtle and gross bodies even daily; in a dream, one's gross body is lying on the bed while the subtle body carries the soul, the living entity, to another atmosphere. But because the gross body has to be continued, the subtle body comes back and settles in the present gross body. Therefore one has to become free from the subtle body also. This freedom is known as mukta-liṅga.