This song could be one of a couple options.
Firstly, it could be about a boy who has discovered something about himself that was enforced as wrong in his family, but he stands in defiance about it. He enjoys wearing women's clothing, and doesn't see anything wrong with it. His family on the other hand, is up-in-arms about the whole situation, and is fighting back to enforce the "right" mentality for their son.
Secondly, It could be an open letter to the world. Billie Joe is bisexual himself, so to see bigotry against those who aren't fully heterosexual could have driven the forces behind this song. This could be his way of getting his point cross, while still having some fun with it. In concert, he has been known to strip down to a thong on stage when doing this son, and dancing around the stage flamboyantly while singing.
Lastly, it could just be a stupid song that is funny, and has a controversial topic of a young child wearing his mothers lingerie.
Whichever way you interpret this song, it's still a ton of fun. Lot's of energy, and the lyrics have an "I don't give a fuck what you say" mentality.