A reference to the 1978 cult mass-suicide in Jonestown, Guyana. Jim Jones, the leader of the group, convinced his followers to move to Jonestown. Late in the year he then ordered his flock to commit suicide by drinking grape-flavored Kool-Aid laced with potassium cyanide. In what is now commonly called "the Jonestown Massacre", 913 of the 1100 Jonestown residents drank the Kool-Aid and died.
One lasting legacy of the Jonestown tragedy is the saying, “Don’t drink the Kool-Aid.” This has come to mean, "Don’t trust any group you find to be a little on the kooky side." or "Whatever they tell you, don't believe it too strongly".
The phrase can also be used in the opposite sense to indicate that one has embraced a particular philosophy or perspective.
Alice: Hey, did you hear that Joe is working on the Nader campaign?
Bob: Yeah, he really drank the Kool-Aid on that one.
Chris: I'm thinking about attending a PETA rally
Donna: Whatever you do, don't drink the Kool-Aid!