Symbolism, Imagery, Allegory
Fool me once, shame on you, fool me twice... well, there's only one Fool in Utopia. But this Fool has the special distinction being both a character and a symbol.
"There was a parasite standing around, who liked to play the fool, and was so good at it that you could hardly tell him from the real thing" (1.26)
In Thomas More's time, to be a "fool" wasn't just to be a dummy. It was, believe it or not, an actual position in courts and wealthy households. The fool essentially had two roles: he was meant to be entertaining (kind of like a clown) and he was meant to be brutally honest (kind of like certain comedians today). The fool would often roam around making fun of people, but in such a way that revealed something true or important about their character. Because this was the fool's job, and because he could pass everything off as a joke, the fool was never really punished.
This meant that the fool was often the only person who could offer honest criticism of someone in power (something Hythloday is very worried about). Regular person criticizes king: off with their head. Fool: whatever, he's just a fool.
In Utopia, we can see the fool exploiting this position when he makes a joke connecting beggars to friars, suggesting that they are both people who endlessly require money. Even though the Friar gets all up in arms, he's the one who ends up looking silly for taking the fool so seriously. Fools aren't supposed to be serious (or are they...?).
Fascinated by Renaissance fools? You should check out the jester (another name for a fool) Feste in William Shakespeare's Twelfth Night.