The formula comes from theIdea of a universal history from a cosmopolitical point of view. The work, published in 1784, evokes the difficulties of the human being to straighten up, that is to say to follow an ordered behavior.
In extenso, here is the sentence of Kant which made date:
In such a curved wood as man is made of, nothing can be cut quite straight.
It is therefore a question of finding rules, laws, directions, so that man subject to all forms of deviance can somehow grow straight, so that he can develop under the right conditions and above all in the right way. But this legislation is impossible in a perfect way, it can only be imperfect, because of the fact that it is the imperfect man who decides his own laws, and the other fact that man is fundamentally issued from a “curved” wood, he is not easily adjustable.