It is pretty much short for "Killed it," as in someone messed something up. This slang came about in Redwood City, CA. It is mostly used there.

Contrary to most of the definitions found here, this is the correct one:
'ILL' : Adjective meaning 'wild' or 'crazy'. Not always derogatory, but used when something may be so outrageous so as to be unruly.
'ILLIN': Adjective or Verb. Lunatic behaviour. See above.

Comes from the word Pills. Pills refering to ecstasy pills. Shortened to ills.

Cool, pimp, mack.

not well, acting sick in some way, either physically or mentally.

To get shitty or get an attitude with someone. or to be bitter and pissed off, angry, especially when showing disrespect or after been disrespected or humiliated or getting fucked off

Ill is the terminology used when a person object or situation is portrayed in an unsavory manner.