According to the American Heritage Dictionary, to "whistle dixie" is "(to engage)] in unrealistically rosy fantasizing". Usually, it's used in a negative way..."Don't just whistle Dixie", for example, means "Don't sit on your ass wasting time".
It comes from the popular southern song,
Dixieland.
See also,
self-delusion,
daydreaming, and/or
bullshit.
