This is what Paul said about the song in Club Sandwich No 72 (Winter 1994):
When my kids were young, they used to call milk "monk", for whatever reason that kids do - I think it's magical the way that kids can develop better names for things than the real ones. In fact, as a joke, Linda and I still occasionally refer to an object by that child-language name.
So, monk was always milk, and monkberry moon delight was a fantasy drink, rather like 'Love Potion No 9', hence the line in the song "sipping monkberry moon delight". It was a fantasy milk shake. Linda has always been very good at making milk shakes and our family is quite into them.