I think what is meant by "parody of fantasy" is that in the book of short stories, for instance, Sapkowski takes familiar fairy tales, and gives them an adult "twist".
Beauty and the Beast, for instance, is a theme of one of the stories, but where Beauty is actually a beast. (But it's not simply turned into a new clichè, the actual "Beast" is not entirely a paragon of virtue, although not quite a beast either; it just puts the story in a totally different perspective.)
The Cinderella story is also given a very interesting twist in one of the stories. And so on. All of this is set within the Witcher universe of course. I greatly enjoy this aspect of Sapkowski's literature, but then I love it when cliche's are taken and viewed from a fresh angle, and with a fresh "twist" added.
A bit like Monty Python. But not all people like Monty Python, so I guess not all people will appreciate Sapkowski's particular dark sense of humor.
Actually, I think the game succeeds admirably at being both light-hearted and serious at the same time, sort of Milan Kundera style. Anybody here who read the book/watched the movie "The Incredible Lightness of Being?" It's like that.
EDIT: Are there any Polish people around this site who are with me here? My father had some Polish friends whom he helped to defect from behind the Iron Curtain back in the day, and they had that same kind of sarcastic, dark humor about their situation there. They would often joke about stuff that must obviously actually have been hurting them. I think you have to understand and appreciate the particular brand of sarcasm and strong sense of irony that is often used.