In an interview, Celentano explains that the song is about "incommunicability" because in modern times people are not able to communicate to each other anymore. He added the only word we need is prisencolinensinainciusol, which is supposed to stand for "universal love." Celentano's rationale for the song was that, after releasing albums about ecology and social issues, "having just recorded an album of songs that meant something, I wanted to do something that meant nothing."
According to various unofficial sources, it's an Italian style pop song written in complete gibberish to express how Italians hear the English language. The artist saw kids rocking out to American songs despite not understanding the words, and this was his answer (beware: It's fascinating and yet can make you queasy! Also, beware the super cheesy 60s music video!)
Hopefully back on track tomorrow with some fun and perhaps fascinating info on Italian Fairies and my Fairy Garden!