It originally signified the Buddha’s act of proclaiming his doctrine (dharma) to the world. The momentous significance of this event was portrayed in canonical sources by comparing the Buddha to the monarch who claims universal sovereignty by driving the wheels of his chariot throughout the earth; in course of time the dhramma-cakka has come to signify Buddhist teaching and doctrine in general.
It appears that Buddhism derived the wheel symbol from ancient Vedic ritual where it signified the sun’s disc, symbolizing cosmic order, and the king’s chariot wheel, symbolizing royal sovereignty; thereby it integrated the ideas of heavenly and earthly power into one single concept.
Therefore, the Buddhists when adopting the wheel as symbolizing themselves were striving to demonstrate that the Buddha’s teaching has a universal, cosmic significance.
The earliest iconography, around second century BC, the dhramma-cakka featured an anti-conic symbol for the Buddha, which was represented either on or above a vacant throne, flanked on either side by two or more gazelles, signifying the Deer Park (Sarnath) where the Buddha first preached, or on top of a column (Sanskrit, cakrastambha), the column signifying the axis mundi (another cosmic symbol), In later iconic representation, this symbolism is inscribed on the Buddha’s body and the soles of his feet or held in his hands.
The dhamma-cakka is depicted above entrances to Buddhist temples, or their gateways throughout Asia. When eight spokes are depicted, or held in his hands, this signifies the Eightfold Path (astangika-marga) or the eight cardinal points of the compass.
In Vajarayana iconography, the wheel is placed on a lotus pedestal and encircled by a halo, which symbolizes the essential world of the Buddhas. In Eastern Asia Buddhist priest use gilt bronze wheels as ritual implements. A.G.H.
Bowker, John, The Oxford Dictionary of World Religions, New York, Oxford University Press, 1997, p. 274