"Taking the piss" means to make fun of or tease someone in a not very nice way. Imagine if you were playing pretend with your friends and one of them pretended to be a superhero but they weren't actually very good at it. If you said, "Ha ha, you can't even fly right, you're such a bad superhero!" then you would be taking the piss. It's not very kind to do this to someone, so it's important to be nice and friendly instead.